CIMA Exam CIMAPRA17-BA3-1 Topic 4 Question 103 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 103
Topic #: 4

Which of the following is the correct double entry for a prepayment?

ADebit expense Credit prepayment (current asset)

BDebit prepayment (current liability) Credit expense

CDebit prepayment (current asset) Credit expense

DDebit expense Credit prepayment (current liability)

Show Suggested Answer

Suggested Answer: A

by Kasandra at Nov 19, 2024, 01:40 AM

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3 days ago

Hmm, this one's tricky. Let me think... Ah, got it! C is the way to go. Prepayments are assets, not liabilities.

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3 days ago

Hmm, I see your point. But I still think option C is the correct one.

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6 days ago

I disagree, I believe it should be Debit expense Credit prepayment (current liability).

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7 days ago

Definitely C. Prepayments are assets, not liabilities. Someone needs a refresher on their accounting basics.

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14 days ago

I think the correct double entry for a prepayment is Debit prepayment (current asset) Credit expense.

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14 days ago

C) Debit prepayment (current asset) Credit expense. Gotta love those prepayments!

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