On July 1 the Fisher Shoe Store Paid $24,000 to Acme

question 177

Multiple Choice

On July 1 the Fisher Shoe Store paid $24,000 to Acme Realty for 6 months rent beginning July 1.Prepaid Rent was debited for the full amount.If financial statements are prepared on July 31, the adjusting entry to be made by the Fisher Shoe Store is:

• A)debit Rent Expense, $24,000; credit Prepaid Rent, $4,000.
• B)debit Prepaid Rent, $4,000; credit Rent Expense, $4,000.
• C)debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.
• D)debit Rent Expense, $24,000; credit Prepaid Rent, $20,000.

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Definitions:

Direct Materials Cost Variance

A measure that evaluates the difference between the actual costs of direct materials used in production and the standard costs.

Direct Materials Price Variance

Direct materials price variance is the difference between the actual cost of direct materials used in production and the standard cost, indicating how much more or less was spent than expected.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.

Flexible Budget Sales

Projected sales figures that can adjust based on changes in production levels or market conditions.