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Why is a Prepayment considered an Asset yet it is a form of an expense that we pay in advance? I am kind of confused on this point.
A prepayment is when you have paid this year for an expense of next year. You have paid too much and so the amount overpaid is an asset.
Have you watched my free lectures? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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