On September 1, your calendar year companypays $12,000 for 1 years rent that you debit toPrepaid Rent. At year end, what adjusting entry will you record?
a.Prepaid Rent4,000
Rent Expense4,000
b.Rent Expense4,000
Cash4,000
c.Rent Expense4,000
Prepaid Rent4,000
d.Prepaid Rent8,000
Rent Expense8,000
6.In June, your calendar year company pays $1,200 for a 1-year insurance policy that you recordedin Prepaid Insurance. If you do not record an adjusting entry at year end, how will the financial statements be affected?
Net incomeAssetsLiabilities
a.overstatednot affectedunderstated
b.overstatedoverstatednot affected
c.understatednot affectedoverstated
d.understatedunderstatednot affected
7.In October, your calendar year company pays $1,200 for 1 years rent that you recorded in Rent Expense. If you do not record an adjusting entry at year end, how will the financial statements be affected?
Net incomeAssetsLiabilities
a.overstatednot affectedunderstated
b.overstatedoverstatednot affected
c.understatednot affectedoverstated
d.understatedunderstatednot affected
8.In July, your calendar year company pays $1,200 for 1 years insurance that you recorded in Prepaid Insurance. If you do not record an adjusting entry at year end, how will the financial statements be affected?
