Prepayments are:
A) not financial instruments because they typically provide a right to future goods or services.
B) financial instruments because they typically provide a right to future goods or services.
C) not financial instruments because they typically provide a right to cash or another financial instrument.
D) financial instruments because they typically provide a right to future goods or services

Question

Quizplus · Accepted Answer

Prepayments are not financial instruments as they do not represent a contractual right to receive cash or another financial instrument. Instead, they represent a payment made in advance for goods or services to be received in the future.

Prepayments Are