A Company Has an Asset Account,Prepaid Utilities,with a Balance of $3,750

question 36

Multiple Choice

A company has an asset account,Prepaid Utilities,with a balance of $3,750 at the beginning of the month.The company used $980 of utilities during the month.Which of the following statements is true?

• A)The company should credit Utility Expenses for $980 and debit Prepaid Utilities for $980.
• B)Retained earnings and shareholders' equity should decrease because of this transaction.
• C)The company should credit Accrued Liabilities for $980 and debit Utility Expenses for $980.
• D)Retained earnings and shareholders' equity should be unchanged by this transaction.

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Definitions:

Shear Zones

Regions of the Earth's crust where deformation has occurred due to differential motion, often associated with the movement of tectonic plates.

Foliation

A geological feature that represents repetitive layering in metamorphic rocks caused by the reorientation of minerals under high pressure and temperature.

Lineation

Lineation in geology refers to any linear feature on the surface of a rock or within a rock mass, often created by the flow of the material or the alignment of minerals during deformation.

Sedimentary Rock

Rock formed from the accumulation or deposition of mineral or organic particles, often in layers, hardened over time by pressure and cementation.