Prepaid Rent Is an Expense Account, and Hence It Appears

question 131

True/False

Prepaid rent is an expense account, and hence it appears on the income statement.

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Definitions:

Debt-To-Equity Ratio

A gauge for the synergy of debt and equity in the financing framework of a company’s assets.

Current Ratio

This ratio evaluates the ability of a business to meet its short-term liabilities by utilizing its current assets.

Quick Ratio

A gauge of a business's capability to cover its short-term debts using its most readily accessible assets.

Fixed Asset

Long-term tangible assets that a company uses in its operations to generate income, such as buildings, machinery, and equipment.