For a Prepaid Expense, the Adjusting Entry Would

question 145

Multiple Choice

For a prepaid expense, the adjusting entry would

• A)Cause a prepaid expense to be overstated and liabilities to be understated.
• B)Decrease cash.
• C)Result in a debit to an expense account and a credit to an asset account.
• D)Result in a debit to a liability account and a credit to an asset account.
• E)Result in a credit to an expense account and a debit to an asset account.

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Definitions:

Established Firm

A company or business entity that has been operational and active in its industry for a considerable period, indicating stability and experience.

Ambidextrous Organization

An organization capable of efficiently managing and exploiting existing competencies while simultaneously exploring and innovating new opportunities.

Organic

In organizations, refers to structures or processes that are flexible, adaptable, and decentralized; in agriculture, pertains to farming practices that avoid synthetic chemicals.

Modular Organization

A flexible organizational structure where components or modules can be easily assembled, reassembled, added, or removed to adapt to changing demands.