Which of the Following Does Not Correctly Describe an Adjusting

question 66

Multiple Choice

Which of the following does not correctly describe an adjusting journal entry that debits rent expense and credits prepaid rent?

• A) It increases expenses and decreases stockholders' equity.
• B) It decreases net income and decreases assets.
• C)It increases expenses and decreases current assets.
• D)It decreases net income and decreases liabilities.

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Definitions:

Keynesian

Pertaining to the economic theories and policies of John Maynard Keynes, emphasizing the role of government intervention to ensure full employment and stable economies.

Classical

Pertaining to the school of economic thought that emphasizes free markets, free trade, and the idea that economies self-regulate through supply and demand.

John Maynard Keynes

A British economist whose theories on the influences of macroeconomic factors on economic output and government interventions shaped modern economics.

Savings

The portion of disposable income not spent on current consumption but set aside for future use, often in a deposit account or as investments.