The Balance in the Prepaid Rent Account Before Adjustment at the End

question 101

Multiple Choice

The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000 and represents three months' rent starting on November 1. The adjusting entry required on December 31 is

• A) debit prepaid rent, $4,000; credit rent expense $4,000.
• B) debit prepaid rent, $8,000; credit rent expense, $8,000.
• C) debit rent expense, $12,000; credit prepaid rent, $12,000.
• D) debit rent expense, $8,000; credit prepaid rent, $8,000.

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Definitions:

Cakes

Baked desserts that are typically sweet and made from ingredients such as flour, sugar, and eggs.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes as more of that good is produced.

Average Variable Cost Curve

A graphical representation showing how the average variable cost of production changes as the quantity of output changes.

Marginal Cost

The augmentation in cumulative cost resulting from the manufacture of an additional unit.