ABC Group (ABC), Headquartered in Switzerland, Is One of the World's

question 11

Multiple Choice

ABC Group (ABC) , headquartered in Switzerland, is one of the world's largest engineering companies.ABC applies U.S.GAAP, and reports its results in millions of U.S.dollars.Based on ABC's financial reports for fiscal 2013, at January 1, 2013, ABC reported a balance in its Prepaid Rent account of $247 million; assume that this amount reflects its prepayments of rent on factory and office space for the next month.Assume also that on January 31, 2013, ABC paid $3,200 million as the annual rent for the period from February 1, 2013, to January 31, 2014.ABC has a calendar year reporting period.Select the correct journal entries that ABC Group would make during January 2013 that affect the Prepaid Rent account.

• A)Rent Expense $3,200 million Cash $3,200 million
• Prepaid Rent $247 million
• Rent Expense $247 million
• B)Rent Expense $3,200 million Prepaid Rent $3,200 million
• Prepaid Rent $247 million
• Cash $247 million
• C)Rent Expense $3,200 million Prepaid Rent $3,200 million
• Prepaid Rent $247 million
• Cash $247 million.
• D)Rent Expense $247 million Prepaid Rent $247 million
• Prepaid Rent $3,200 million
• Cash $3,200 million.
• E)none of the above

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Definitions:

Engine Work

The maintenance, repair, or overhaul of an engine to improve its performance or to restore its functioning.

State Statutes

Laws enacted by the legislative branch of a state government, applicable within the boundaries of that state.

Hotel Operators

Individuals or companies responsible for managing hotels, including their day-to-day operations and overall strategic planning.

Liability

Refers to the state of being legally responsible for something, typically referring to debts or obligations.