Question

5. Which of the following is not debited to the old partners’ capital/current accounts at the time of

admission?

a. Advertisement Suspense

b. Preliminary Expenses

c. Deferred Revenue Expenditure

d. Prepaid Expenses​

Answer 1

Answer:

prepaid expense is the answer

Answer 2

Prepaid expenses are not debited to the old partners' capital/current accounts at the time of admission.

• Prepaid expenses are those expenses that are already paid in advance. They are treated as future expenses and are first recorded as assets.
• Most prepaid expenses occur on the balance sheet as the current assets as long as the expense is not to be incurred within 12 months.
• One of the most common examples of prepaid expenses is insurance.