A Company Reported an Increase in Prepaid Rent and an Increase

question 14

Multiple Choice

A company reported an increase in prepaid rent and an increase in accrued liabilities during 2014. Which of the following statements is correct?

• A) When determining cash paid for operating expenses, both the increase in prepaid rent and the increase in accrued liabilities are subtracted from operating expenses.
• B) When determining cash paid for operating expenses, both the increase in prepaid rent and the increase in accrued liabilities are added to operating expenses.
• C)When determining cash paid for operating expenses, the increase in prepaid rent is added to operating expenses and the increase in accrued liabilities is subtracted from operating expenses.
• D)When determining cash paid for operating expenses, the increase in prepaid rent is subtracted from operating expenses and the increase in accrued liabilities is added to operating expenses.

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Definitions:

Profiteering

The act of making an excessive or unfair profit, especially in unethical ways or during times of crisis or shortage.

Income Tax

Income tax is a tax levied by governments on individuals or entities based on their income or profits.

Urban Neighborhood

A sector within a city characterized by distinct residential and/or commercial areas, often with its own unique identity or culture.

Ethnic Background

Refers to a person's heritage, cultural identity, and ancestry, often related to a specific group characterized by shared traditions, languages, or historical origins.