If Rent Expense Has Been Debited, It Is Likely That

question 109

Multiple Choice

If Rent Expense has been debited, it is likely that:

• A) the rent was paid for three months in advance.
• B) a copy of the lease was received.
• C) this month's rent was paid.
• D) All of these are possible.

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Definitions:

Net Income

The net income of a company, which is the amount remaining after deducting all costs and taxes from its total revenue.

Operating Expenses

The ongoing costs incurred in the operation of a business, excluding the cost of goods sold.

Periodic Inventory System

An inventory system where the inventory count is updated and cost of goods sold is calculated at specific intervals, not continuously.

Purchase Returns and Allowances

Concessions granted by sellers to buyers, involving the return of goods or issuance of allowances for unsatisfactory products or services.