In Adjusting for a Prepayment, the Expense Account Needs to Be

question 11

Multiple Choice

In adjusting for a prepayment, the expense account needs to be ________ and an asset account needs to be ________.

• A)set up; credited
• B)set up; reduced
• C)credited; debited
• D)debited; credited

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Definitions:

Wages

The fixed regular payment, typically calculated on a daily or hourly basis, made by an employer to an employee, especially to a manual or unskilled worker.

Crude Oil

A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials.

Gasoline Production

The process of refining crude oil and blending various components to create gasoline, a major fuel used in internal combustion engines.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that suppliers are willing and able to provide at each price level.