At the Time a Company Prepays a Cost

question 87

Multiple Choice

At the time a company prepays a cost

• A) it debits an asset account to show the service or benefit it will receive in the future.
• B) it debits an expense account to match the expense against revenues earned.
• C) its credits a liability account to show the obligation to pay for the service in the future.
• D) More than one of these answers are correct.

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Definitions:

First Amendment

A provision in the United States Constitution that prohibits the government from making laws that infringe upon the freedom of speech, religion, assembly, and the press.

Free-Exercise Clause

A clause in the First Amendment of the U.S. Constitution that states that government (state and federal) cannot make a law “prohibiting the free exercise” of religion. This clause is interpreted to include absolute freedom to believe and freedom to act that may face state restriction.

First Amendment

An amendment to the United States Constitution prohibiting the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering with the right to peaceably assemble, or prohibiting the petitioning for a governmental redress of grievances.

Prohibiting

The act of legally preventing or forbidding something from happening or being done.