A club paid subscription fees of `1,400. Out of which ` 200 is prepaid. In such case
ABoth B. and C. above
BP&L A/C is debited with 1,200
CP&L A/C is debited with 1,400
D200 is shown as current asset
Correct answer
A. Both B. and C. above
Explanation
Adjustments for prepaid subscription fees: P& L A/c Extract Total subscription fees paid 1,400 Less: Subscription fees prepaid Relating to next A/c period 200 Subscription fees 1200 The prepaid subscription fees of ` 200 will be shown as a current asset in the Balance Sheet as it is an expense relating to the next accounting period but has been paid in the current accounting period.]