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Gavin Sawyer
on Nov 15, 2024

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On a classified statement of financial position, prepaid expenses are classified as

A) a current liability.
B) property, plant, and equipment.
C) a current asset.
D) a long-term investment.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, considered as current assets on a balance sheet.

Current Asset

Current Assets are assets expected to be converted into cash, sold, or consumed during a company's next operating cycle or within a year, including cash, inventory, and accounts receivable.

  • Identify the distinctions between current and non-current assets and liabilities.
  • Understand the crucial role of ordering by liquidity when displaying current assets and liabilities in financial reports.
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AT
Aisha TourayNov 19, 2024
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