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.

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Definitions:

Job Description

A formal account of an employee's responsibilities, duties, and the scope of a job, including details about the role, working conditions, and expected contributions.

Job Identification

The unique process of defining and categorizing a specific job based on its duties, responsibilities, and requirements.

Task Statements

are detailed descriptions of the specific duties, responsibilities, and outputs expected from a job position.

Essential Duties

The critical and fundamental job functions or tasks that an employee must be able to perform.