Is prepaid rent a permanent account?
Understand the Problem
The question asks whether prepaid rent is classified as a permanent account in accounting terms. To address this, we need to acknowledge the nature of prepaid rent and its categorization within accounting principles.
Answer
Yes
The final answer is Yes, prepaid rent is a permanent account.
Answer for screen readers
The final answer is Yes, prepaid rent is a permanent account.
More Information
Prepaid rent is considered a permanent account because it is recorded on the balance sheet, not closed at the end of the accounting period, and remains active as long as the asset is in use.
Tips
A common mistake is to confuse prepaid rent with rent expense. Rent expense is a temporary account closed at the end of the period.
Sources
- Permanent accounts would not include ... - quizlet.com
- How to Differentiate between Temporary and Permanent Accounts - highradius.com
- Temporary vs Permanent Accounts – A Comparison Guide - ReliaBills - reliabills.com
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