Use This Information to Answer the Following Question

question 13

Multiple Choice

Use this information to answer the following question. The trial balance for Sanchez Company appears as follows:
If as of December 31, 2010, the rent of $100 for December had not been recorded or paid, the adjusting entry would include a

• A) debit to Rent Expense for $100.
• B) debit to Rent Payable for $100.
• C) credit to Cash for $100.
• D) credit to Accumulated Rent for $100.

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Definitions:

Small Firms

Companies with a relatively small market capitalization, often characterized by fewer employees and lower revenues compared to larger corporations.

Capital Projects

Large-scale investment projects that are undertaken by organizations to build, maintain, or improve on their capital assets.

Payback Method

A simplistic financial analysis technique that calculates the time required for an investment to generate cash flows sufficient to recover its initial cost.

Replacement Chain Method

A capital budgeting decision tool that compares different projects by analyzing them over a common time period, particularly useful for comparing investments of different durations.