If a Company Fails to Adjust a Prepaid Rent Account

question 83

Multiple Choice

If a company fails to adjust a Prepaid Rent account for rent that has expired,what effect will this have on that month's financial statements?

• A)Failure to make an adjustment does not affect the financial statements.
• B)Assets will be overstated and profit and shareholders' equity will be understated.
• C)Assets will be overstated and profit and shareholders' equity will be overstated.
• D)Expenses will be overstated and profit and shareholders' equity will be understated.

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Definitions:

Accountability

The responsibility to explain or justify actions to someone in a position of authority.

Decision-Making

The cognitive process of selecting a course of action from among multiple alternatives.

Collaborative Practice Model

An approach in healthcare and other fields where professionals from different specialties work together to improve outcomes and provide comprehensive services.

Intraprofessional

Pertaining to interactions and collaboration within the same profession, especially in a healthcare context.