If a Company Records Prepayment of Expenses in an Asset

question 207

Multiple Choice

If a company records prepayment of expenses in an asset account, the adjusting entry would:

• A) Result in a debit to an expense and a credit to an asset account.
• B) Cause an adjustment to prior expense to be overstated and assets to be understated.
• C) Cause an accrued liability account to exist.
• D) Result in a debit to a liability and a credit to an asset account.
• E) Decrease cash.

---

Definitions:

Late-onset Alzheimer's

Late-onset Alzheimer's is the most common form of Alzheimer's disease, typically occurring in individuals aged 65 and older, characterized by progressive cognitive decline.

Biological Test

A medical test that evaluates biological samples (e.g., blood, urine, tissues) to diagnose or monitor diseases and conditions.

Beta-amyloid

A protein fragment believed to be a significant contributor to the development of Alzheimer's disease.

Presenilin Protein

A protein that plays a key role in the formation of amyloid precursor protein, a substance associated with the development of Alzheimer's disease.