On October 31,your Company Prepays Rent of $7,000 for November

question 28

Multiple Choice

On October 31,your company prepays rent of $7,000 for November and December.Which of the following describes the effects of this transaction on your company's accounting equation?

• 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.

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Definitions:

Competitive Advantage

The attributes or capabilities that allow an organization to outperform its competitors, typically leading to greater market share or profitability.

Technology

The application of scientific knowledge for practical purposes, particularly in industry, to create tools, systems, or methods that solve problems or facilitate processes.

Competitive Advantage

An edge that a company has over its competitors, enabling it to generate greater sales or margins and/or retain more customers.

Continuous-process Production

A method of production where materials are continuously in motion or processing to produce goods, often used in industries where the product is indistinguishable from batch-processing.