Question

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets

B. Long-term investments

C. Plant assets

D. Intangible assets

E. Current liabilities

F. Long-term liabilities

G. Equity

3. Prepaid rent

Short answer

The correct answer is A, Current assets.

Step-by-step solution

Definition of Rent

The amount paid by an individual or organization for using someone else asset for a fixed time interval can be termed as the rent for the asset.

Reason of choice

Prepaid rent should be shown as the current asset because it provides benefit to the organization in a shorter period, generally in less than one year.