The correct answer is b. prepaid expense.

Here's why:

Adjusting entries are made at the end of an accounting period to record all revenues and expenses that have not been recorded but belong in the current period.

a. Accrued expenses are expenses that have been incurred but not yet paid. This would typically involve a debit to an expense account and a credit to a liability account, not an asset account.

b. Prepaid expenses are expenses that have been paid in advance and are initially recorded as assets. As the benefit of the prepaid item is used or expires, an adjusting entry is made to debit (increase) an expense account and credit (decrease) the related asset account.

c. Accrued revenues are revenues that have been earned but not yet received. This would typically involve a debit to an asset account and a credit to a revenue account.

d. Depreciation expense involves allocating the cost of a long-term asset over its useful life. This would typically involve a debit to depreciation expense and a credit to accumulated depreciation, a contra-asset account.

Question

The correct answer is b. prepaid expense.

Here's why:

Adjusting entries are made at the end of an accounting period to record all revenues and expenses that have not been recorded but belong in the current period.

a. Accrued expenses are expenses that have been incurred but not yet paid. This would typically involve a debit to an expense account and a credit to a liability account, not an asset account.

b. Prepaid expenses are expenses that have been paid in advance and are initially recorded as assets. As the benefit of the prepaid item is used or expires, an adjusting entry is made to debit (increase) an expense account and credit (decrease) the related asset account.

c. Accrued revenues are revenues that have been earned but not yet received. This would typically involve a debit to an asset account and a credit to a revenue account.

d. Depreciation expense involves allocating the cost of a long-term asset over its useful life. This would typically involve a debit to depreciation expense and a credit to accumulated depreciation, a contra-asset account.

Knowee AI · Accepted Answer

The correct answer is b. prepaid expense.

Here's why:

Adjusting entries are made at the end of an accounting period to record all revenues and expenses that have not been recorded but belong in the current period.

a. Accrued expenses are expenses that have been incurred but not yet paid. This would typically involve a debit to an expense account and a credit to a liability account, not an asset account.

b. Prepaid expenses are expenses that have been paid in advance and are initially recorded as assets. As the benefit of the prepaid item is used or expires, an adjusting entry is made to debit (increase) an expense account and credit (decrease) the related asset account.

c. Accrued revenues are revenues that have been earned but not yet received. This would typically involve a debit to an asset account and a credit to a revenue account.

d. Depreciation expense involves allocating the cost of a long-term asset over its useful life. This would typically involve a debit to depreciation expense and a credit to accumulated depreciation, a contra-asset account.

An entry that results in a debit to an expense account and a credit to a related asset account is an example of which category of adjusting entries?*a. accrued expenseb. prepaid expensec. accrued revenued. depreciation expense

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