What do you think is the most common reason for prepayment? List four prepayment types and...

What do you think is the most common reason for prepayment? List four prepayment types and explain them.

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Expert Solution

The prepayment is the process in which the payment is made or received before its arises legally. The prepayment can be made to avoid contengencies. The firm cash flow may decrease so in order to avoid any legal implications the fims can pay before thier actual liability.

1. Complete - In this prepayment, all the liability of a particular nature can be taken into consideration and paid at one time.

2. Partial - In this partial amount takes place not full amount.

3. Money out - It is something when we pay in advance.

4. Money in - This is receiving the money in advance for doing something.

jeff jeffy answered 2 years ago

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