In October, Your Company Prepays Rent of $7,000 for November

question 8

Multiple Choice

In October, your company prepays rent of $7,000 for November and December. Which of the following describes the effects of this transaction in October?

• A) Assets decrease $7,000 and liabilities decrease $7,000.
• B) Assets increase $7,000 and stockholders' equity increases $7,000.
• C) There is no change to total assets, liabilities or stockholders' equity.
• D) Liabilities decrease $7,000 and stockholders' equity increases $7,000.

---

Definitions:

Semantic Information

Refers to the meaning and interpretation of words and sentences in a given context.

Morpheme

The smallest grammatical unit in a language that conveys meaning; may be a word or a part of a word, such as a prefix or suffix.

Fast Mapping

the process by which children learn a new word or concept after minimal exposure to it, a testament to the quick cognitive absorbency of children.

Chromium

A chemical element with symbol Cr and atomic number 24, known for its role in glucose metabolism and its potential effects on insulin sensitivity.