A New Company Signed a Lease for Office Space During

question 22

Multiple Choice

A new company signed a lease for office space during their first month of business.At that time they paid a total of $12,000 for first and last months' rent.At the end of the first month, the effect on the financial statements would be:

• A)$12,000 rent expense
• B)$6,000 rent expense and $6,000 prepaid rent on the balance sheet
• C)$12,000 prepaid rent on the balance sheet
• D)Nothing recorded because the company has not made any sales yet

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Definitions:

Reengineering

A process of redesigning business processes and organizational structures to achieve significant improvements in critical aspects like quality, output, cost, service, and speed.

Innovation

The process of creating and implementing new ideas, methods, or products to improve efficiency, effectiveness, or competitive advantage.

Functional Departmentalization

A method of organizing a company's structure based on specialized functions, such as marketing, finance, and operations.

Geographic

Relating to the physical features of the earth or the distribution of populations, often influencing environmental, economic, and social patterns.