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What will be the result of prepayment of rent expense in adjusting entry? a. An increase in total expense b. A decrease in total expense c. An increase in total assets d. A decrease in total assets

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 4PA: Identify which type of adjustment is associated with this account, and what is the other account in...

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

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What will be the result of prepayment of rent expense in adjusting entry?

a. An increase in total expense

b. A decrease in total expense

c. An increase in total assets

d. A decrease in total assets

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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