Failure to Record the Expired Amount of Prepaid Rent Expense

question 3

Multiple Choice

Failure to record the expired amount of prepaid rent expense

• A) Overstates expenses
• B) Understates net income
• C) Overstates owner's equity
• D) Overstates liabilities

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Definitions:

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive (beneficial) or negative (harmful).

Education's Benefit

Refers to the positive impacts of education on an individual's abilities, earning potential, and societal contributions.

Externality

A cost or benefit arising from an economic activity that affects third parties who did not choose to incur that cost or benefit.

National Defense

The government activities, plans, and policies aimed at protecting a country's territory and citizens from external threats and maintaining overall security.