Prepayments occur when cash payment (or an obligation to pay cash) occurs before the cost is used in running the business.

a. What is a prepayment and when does it occur in a business?
b. When does a prepayment occur in a business and what is the definition of prepayment?
c. What is the definition of prepayment and when does it occur in a business?
d. When does a prepayment occur in a business and what is its significance?