Recording an advanced payment made for the lease as an expense in the first month would not adequately match expenses with revenues generated from its use. Therefore, it should be recorded as a prepaid expense and allocated to expenses over the full 12 months. Journal entries that recognize expe...
Prepaid expenses aren’t included in the income statement pergenerally accepted accounting principles (GAAP). In particular, the GAAP matching principle requiresaccrual accounting, which stipulates that revenue and expenses must be reported in the period that the spending occurs, not when cash or money...
Alex Groth, Journal Sentinel, 4 Apr. 2024 Other options may be prepaying upcoming expenses for the year, such as software services, insurance plans and IT services. Rina Mehta, Kansas City Star, 24 Jan. 2024 Savers can spend hundreds, not thousands of dollars initially, to prepay just one...
45.)Which of the following does not correctly describe an adjusting journal entry that debits interest expense and credits interest payable? It increases expenses and decreases retained earnings.Which of the following accounts is a temporary account?...
Debit and Credit Entries: In accounting, the first stage in the book-keeping process is represented by creating journal entries. Every transaction is usually recorded by creating two simultaneous entries, namely, one debit entry and one credit entry. ...
Prepaid Rent and Advertis For the following account, determine whether the account increases with a debit or a credit: Bonds Payable. Which of the following doesn't correctly describe a journal entry which debits rent expense and credits prepaid...
Which of the following doesn't correctly describe a journal entry which debits rent expense and credits prepaid rent? a) It increases expenses and decreases retained earnings. b) It decreases net income and decreases assets. c) It increases e...