A Company Shows a $600 Balance in Prepaid Rent in the Unadjusted

question 16

Multiple Choice

A company shows a $600 balance in Prepaid Rent in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired rent of $200.This adjusting entry results in:

• A)$200 decrease in net income.
• B)$200 increase in net income.
• C)$200 difference between the debit and credit columns of the Unadjusted Trial Balance.
• D)$200 of prepaid insurance.
• E)An error in the financial statements.

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