Question

Please answer ASAP:

Eve runs a small Business. She runs her business operations from a rented office. Eve has paid the office rent worth $10,000 for the next four months in advance. Under which component of her businesses balance sheet with this amount fall?
A. Current assets
B.fixed assets
C. Current liabilities
D. Long term liabilities
E. Owners equity

Answer 1

A

Step-by-step explanation:

it is current assets because she has paid for it in advance and it is a short period of time.

Answer 2

A. Current assets

Step-by-step explanation:

Eve has prepaid her rent for the next four months. It means Eve has made payments for a service that she is yet to consume. Prepayments are currents assets. In this case, Eve's landlord owes her four months' worth of rent, only that she does not expect monetary payment.

Because Eve will use the room for four months without payments, the rent prepayment is an asset to the business.

Current assets are the assets convertible to cash in a period of one year or less. Liabilities would be the money Eve owes to third parties.