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Additional paid in capital is an equity account.
The correct answer among the various given choices is letter e. Prepayment is the account described as an amount simply paid in advance for goods or services anticipated to be received by the entity in the future.Prepayment
Prepayment or Prepaid Expenses is considered an asset which is classified under current asset. A prepaid expense is an advance expenditure that is under current asset section in the balance sheet until the prepaid item is consumed. Prepaid expenses are normally used or consumed within the normal operating cycle of the business or within 1 year.
Once consumption occurred, the portion used will be removed from prepaid expense account in the balance sheet and now reported to be a part of expense account in the income statement.Example of Prepaid ExpensesPrepaid InsurancePaying rent before occupying
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