What Type of Account Is Prepaid Rent and What Is

question 35

Essay

What type of account is Prepaid rent and what is its normal balance?
A) Expense and debit
B) Liability and credit
C) Revenue and credit
D) Asset and debit

• A) Expense and debit
• B) Liability and credit
• C) Revenue and credit
• D) Asset and debit

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Definitions:

Unadjusted Trial Balance

A list of all the accounts and their balances from the general ledger before any adjusting entries are made.

Gross Profit

The difference between sales and the cost of goods sold.

Periodic Inventory Method

An accounting approach where inventory is physically counted at specific intervals to determine the cost of goods sold and ending inventory levels.

Beginning Inventories

Beginning inventories are the value of a company's inventory at the start of an accounting period, serving as a basis for determining the cost of goods sold.