Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 5 - No. 1)

Which of the following would be an example of a 'prepayment'?
Rent paid for the next month.
Utilities bill received but not yet paid.
Salary owed to employees.
Cash received from a donation.

Explanation

Rent paid for the next month is a prepayment.

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