What Type of Account Is Prepaid Rent and What Is

question 50

Multiple Choice

What type of account is Prepaid rent and what is its normal balance?

• A)Revenue and credit
• B)Asset and debit
• C)Liability and credit
• D)Expense and debit

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Definitions:

LIFO

Stands for Last In, First Out, an inventory valuation method which assumes that the last items placed in inventory are sold first.

Financial Statement

Documented records that outline the financial activities and condition of a business, individual, or other entity.

LIFO Reserve

The difference between the cost of inventory calculated under the LIFO method and its cost calculated under the FIFO method.

FIFO Firms

Companies that apply the First-In, First-Out method in their inventory management, recognizing the oldest inventory items as the first sold.