Florida Real Estate Practice Exam

Which of the following is considered a typical prepaid item?

1. Rent collected by the seller for a future period

2. Heating oil in the tank

3. Interests on the seller's mortgage

4. Unpaid real estate taxes

The correct answer is: Heating oil in the tank

A Rent collected by the seller for a future period is not a prepaid item because it is typically a liability for the seller, not a prepaid asset. B: Heating oil in the tank is considered a typical prepaid item because it is an expense that has been paid in advance and has not yet been used. This is similar to other prepaid expenses such as insurance or supplies. C: Interests on the seller's mortgage is not a prepaid item because it is an ongoing expense that accrues over time, rather than being paid in advance. D: Unpaid real estate taxes is not a prepaid item because it is an expense that has not yet been paid, rather than being paid in advance.