If a Business Issued a Check for $1,000 to Pay

question 78

Multiple Choice

If a business issued a check for $1,000 to pay for two months rent in advance,analyze the effect on the firms' assets,liabilities and owner's equity.

• A) Cash will increase
• B) Accounts Payable will decrease
• C) Prepaid Rent will increase
• D) Owner's Capital will increase

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Definitions:

Market System

An economic system where the allocation of resources and the distribution of goods and services are determined by supply and demand in a free market.

Government Prescribes

Refers to regulations or directives made by a government to influence or control certain activities.

Private Property

Land or belongings owned by individuals or corporations, distinct from property owned by the government or community.