PRC-1 · Chapter 4 · Question 80 of 100
A company pays property taxes of Rs. 48,000 per year covering the period from April 1 to March 31. The payment is made in full on April 1. For the financial year ending December 31, what is the value of the prepaid property tax?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 12,000
Explanation
The payment covers the next year's Jan-Mar period, which is 3 months. 48,000 x (3/12) = Rs. 12,000 prepaid.
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