A New Company Signed a Lease for Office Space During

question 41

Multiple Choice

A new company signed a lease for office space during their first month of business. At that time, they paid a total of $16,000 for first and last months' rent. At the end of the first month, the effect on the financial statements would be:

• A) $14,000 rent expense
• B) $8,000 rent expense and $8,000 prepaid rent
• C) $14,000 prepaid rent
• D) Nothing is recorded because the company has not made any sales yet

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Definitions:

Satellite Communications

The use of satellite technology to transmit and receive signals for telecommunications purposes.

Emergency Service

Public or private organizations that provide rapid response and assistance during emergencies or crises, such as fire departments, medical services, and police.

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A competitive strategy where a business seeks to distinguish its products or services from competitors through unique features.