A Company Has an Asset Account,Prepaid Utilities,with a Balance of $3,750

question 36

Multiple Choice

A company has an asset account,Prepaid Utilities,with a balance of $3,750 at the beginning of the month.The company used $980 of utilities during the month.Which of the following statements is true?

• A)The company should credit Utility Expenses for $980 and debit Prepaid Utilities for $980.
• B)Retained earnings and shareholders' equity should decrease because of this transaction.
• C)The company should credit Accrued Liabilities for $980 and debit Utility Expenses for $980.
• D)Retained earnings and shareholders' equity should be unchanged by this transaction.

---

Definitions:

Conflict

A situation or process through which individuals, groups, or ideas are in opposition and engaged in a struggle for dominance, agreement, or resolution.

Cognitive Dissonance

The psychological discomfort or stress experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time.

Boring Task

An activity that lacks interest or excitement, often leading to a state of weariness or impatience.

Minimum Reward

The smallest incentive or compensation provided for a task or activity that still motivates behavior or participation.