Asked by Sandra Belgarde on Jun 25, 2024
Verified
Paid six months of rental payments to the landlord.
A) Prepaid expense
B) Accrued expense
C) Unearned revenue
D) Accrued revenue
E) None of these choices
Prepaid Expense
An expense that has been paid in advance and is considered an asset until it is actually used or consumed.
Rental Payments
Rental payments are periodic payments made by a lessee to a lessor for the use of a property, equipment, or vehicle.
- Understand the concept of adjusting entries and why they are necessary in accrual basis accounting.
- Identify and classify different types of accounts that require adjustments, such as prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.
Verified Answer
SA
Shaikh AbdulaleemJun 27, 2024
Final Answer :
A
Explanation :
Prepaid expense - Because the payment was made in advance for the rental payments, it is considered a prepaid expense.
Learning Objectives
- Understand the concept of adjusting entries and why they are necessary in accrual basis accounting.
- Identify and classify different types of accounts that require adjustments, such as prepaid expenses, unearned revenues, accrued revenues, and accrued expenses.
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