Asked by
Gangadhar Chowdary
on Oct 16, 2024Verified
Assuming prepaid expenses are originally recorded in balance sheet accounts,the adjusting entry to record use of a prepaid expense is:
A) Increase an expense; increase a liability.
B) Increase an asset; increase revenue.
C) Decrease a liability; increase revenue.
D) Increase an expense; decrease an asset.
E) Increase an expense; decrease a liability.
Prepaid Expense
Payments made in advance for goods or services to be received in the future, recognized as assets until used.
Adjusting Entry
A financial record created at the close of an accounting period to assign earnings and expenses to the time they truly took place.
- Gain an understanding of the various methods employed in accounting for expenses paid in advance and revenue not yet earned.
Verified Answer
JS
Learning Objectives
- Gain an understanding of the various methods employed in accounting for expenses paid in advance and revenue not yet earned.
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