A club paid subscription fees of `1,400. Out of which ` 200 is prepaid. In such case

Accounting Mcqs 05/04/2022

A. P&L A/C is debited with 1,400
B. P&L A/C is debited with 1,200
C. 200 is shown as current asset
D. Both B. and C. above

Adjustments for prepaid subscription fees:
P& L A/c Extract
Total subscription fees paid 1,400
Less: Subscription fees prepaid
Relating to next A/c period 200
Subscription fees 1200
The prepaid subscription fees of ` 200 will be shown as a current asset in the Balance Sheet as it is
an expense relating to the next accounting period but has been paid in the current accounting
period.]

The Correct answer is D. Both B. and C. above

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