Nneka Trading Company's rent account for the year ended 30 September 2023 shows the following: Opening prepayment ₦90,000; Cash paid during the year ₦540,000; Closing accrual ₦45,000. What is the rent expense to be charged to the statement of profit or loss for the year ended 30 September 2023?

Rent expense is calculated as: Cash paid ₦540,000 less opening prepayment ₦90,000 (already expensed in the prior year, so it reduces this year's charge — wait, the opening prepayment was an asset brought forward meaning it becomes an expense this year, so it is added) plus closing accrual ₦45,000. Correct formula: Expense = Opening prepayment + Cash paid + Closing accrual = ₦90,000 + ₦540,000 + ₦45,000 = ₦675,000. The opening prepayment relates to the current period and is now an expense; the closing accrual is an additional expense incurred but not yet paid.