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March 15, 2026, 11:04:36 am
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Author Topic: Cmidge text question  (Read 912 times)  Share 

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naved_s9994

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Cmidge text question
« on: December 02, 2009, 09:30:02 am »
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Exercise 2.7 Cambridge.
It says its paid Prepaid Rent of 6 months in advance, $1200 (I.E current asset)

However in the solutions it also adds this $1200 to Bank Overdraft?
Can anyone help?

THanks
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Aqualim

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Re: Cmidge text question
« Reply #1 on: December 02, 2009, 10:27:04 am »
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After having a look at the solutions, i'm guessing this is because the business has paid for it in advance, and the amount must be duducted from the bank and increase the asset 'Prepaid Rent' (hence Double Entry Accounting), thus decreasing the bank further and increasing Bank overdraft.

Not sure If I answered your question here
« Last Edit: December 02, 2009, 10:29:27 am by Aqualim »
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naved_s9994

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Re: Cmidge text question
« Reply #2 on: December 02, 2009, 12:04:06 pm »
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Quote from: Aqualim on December 02, 2009, 10:27:04 am
After having a look at the solutions, i'm guessing this is because the business has paid for it in advance, and the amount must be duducted from the bank and increase the asset 'Prepaid Rent' (hence Double Entry Accounting), thus decreasing the bank further and increasing Bank overdraft.

Not sure If I answered your question here


Yea you have. Thanks!
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