A Business Prepays Four Months' Office Rent

question 194

Multiple Choice

A business prepays four months' office rent.Which of the following accounts is debited?

• A) Rent Expense
• B) Cash
• C) Prepaid Rent
• D) Unearned Rent

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Definitions:

Withholding Allowance

Withholding Allowance refers to an exemption that reduces the amount of income tax an employer deducts from an employee's paycheck, based on their personal and dependent status.

Federal Income Tax

An annual financial obligation required by the federal government from individuals, corporations, trusts, and other lawful entities.

Gross Earnings

The total amount of income received before any deductions or taxes are subtracted.

Net Pay

The amount of money received by an employee after all deductions have been made from the gross salary.