Question

Show me paid rent in advance 2500,how it effect in accounting equation.

Answer 1

Answer:

subtract from cash...and add in prepaid colomn of asset....

Answer 2

Ans less from concern expense (p&l ) dr

Balance sheet asset side

Explanation:

Rent paid in advance is also know as prepaid expense . i.e future expense u paid in advance .as its not for current year therefore it is asset .

Similary prepaid income is liability