As Prepaid Expenses Expire with the Passage of Time the Correct

question 17

Multiple Choice

As prepaid expenses expire with the passage of time the correct adjusting entry will be a

• A) debit to an asset account and a credit to an expense account.
• B) debit to an expense account and a credit to an asset account.
• C) debit to an asset account and a credit to an asset account.
• D) debit to an expense account and a credit to an expense account.

---

Definitions:

Debt Financing

Acquiring funds for business activities by borrowing money, typically through loans or by issuing bonds, that must be repaid with interest.

Entrepreneurial Start-Up

A newly founded company with innovative business ideas aimed at addressing unmet market needs or offering new solutions.

Equity Financing

The method of raising capital by selling company shares to investors; in return, investors receive ownership interests in the company.

Debt Financing

A method of raising capital through borrowing money that must be repaid, typically with interest.