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Good day Tutor,
This is a straight forward question.
I’m always confused as to whether a lease payment is made in areas or advance if it’s not stated in the question.
How can I know if it is made in areas or advance if not given in the question. ?
if not specifically stated then you will need to use the dates given in the question. So if we have a lease starting on the 1 January 2020 and the first payment is on the 1 January 2020 then that is a payment in advance as it is at the start of the lease period and in advance of using the asset.
If the payment is on 31 December 2020 then that is a payment at the end of the lease period and in arrears as it is after using the asset.