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Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?
- a)Equity
- b)Expense
- c)Asset
- d)Liability
Correct answer is option 'C'. Can you explain this answer?
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Rent expense of a non-profit organization paid in advance. Which of th...
Classification of rent paid in advance by a non-profit organization:
Asset:
When a non-profit organization pays rent in advance, it is considered as a prepayment or advance payment. As per accounting principles, prepayments are assets that represent future economic benefits. Therefore, rent paid in advance is classified as an asset.
Explanation:
Rent paid in advance is considered as a prepayment or advance payment because the non-profit organization has paid for a future benefit. The organization will be able to use the rented space for a specified period in the future. Therefore, the prepayment represents a future economic benefit.
Asset classification:
Assets are resources that are controlled by an organization and are expected to provide future economic benefits. Assets can be classified as current or non-current, depending on their liquidity and expected period of use.
In this case, rent paid in advance is a current asset because it is expected to provide a future economic benefit within a year.
Conclusion:
Rent paid in advance by a non-profit organization is classified as an asset because it represents a future economic benefit. The prepayment is considered as a current asset as it is expected to provide a future economic benefit within a year.
Asset:
When a non-profit organization pays rent in advance, it is considered as a prepayment or advance payment. As per accounting principles, prepayments are assets that represent future economic benefits. Therefore, rent paid in advance is classified as an asset.
Explanation:
Rent paid in advance is considered as a prepayment or advance payment because the non-profit organization has paid for a future benefit. The organization will be able to use the rented space for a specified period in the future. Therefore, the prepayment represents a future economic benefit.
Asset classification:
Assets are resources that are controlled by an organization and are expected to provide future economic benefits. Assets can be classified as current or non-current, depending on their liquidity and expected period of use.
In this case, rent paid in advance is a current asset because it is expected to provide a future economic benefit within a year.
Conclusion:
Rent paid in advance by a non-profit organization is classified as an asset because it represents a future economic benefit. The prepayment is considered as a current asset as it is expected to provide a future economic benefit within a year.
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Rent expense of a non-profit organization paid in advance. Which of th...
As rent is paid in advance therefore it is classified as assets
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Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?a)Equityb)Expensec)Assetd)LiabilityCorrect answer is option 'C'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?a)Equityb)Expensec)Assetd)LiabilityCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?a)Equityb)Expensec)Assetd)LiabilityCorrect answer is option 'C'. Can you explain this answer?.
Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?a)Equityb)Expensec)Assetd)LiabilityCorrect answer is option 'C'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?a)Equityb)Expensec)Assetd)LiabilityCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?a)Equityb)Expensec)Assetd)LiabilityCorrect answer is option 'C'. Can you explain this answer?.
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