Chapter 3 ACCT Review

During the year: A company pays cash of rent in advance of the rental period. This transaction is recorded with an increase to...

• Prepaid Rent

• Rent Expense

• Rent Payable

• Rent Revenue

End of year: The adjusting entry needed to record the amount of Prepaid Rent expired for the year includes...

• Debit Prepaid Rent; credit Cash

• Debit Prepaid Rent; credit Rent Expense

• Debit Rent Expense; credit Prepaid Rent

• Debit Cash; credit Prepaid Rent

When a company prepays rent during the year, which of the following best explains the amount to report for Rent Expense in the income statement at the end of the year?

• Total cash paid for rent.

• The amount of rent expired during the year.

• The amount of rent not expired by the end of the year.

When a company prepays rent during the year, which of the following best explains the amount to report for Prepaid Rent in the balance sheet at the end of the year?

• Total cash paid for rent.

• The amount of rent expired during the year.

• The amount of rent not expired at the end of the year.

At end of the year, a company prepares closing entries which includes...

• Reducing the balances of all revenue accounts and expense accounts to zero.

• Increasing the balance of Retained Earnings by the amount of total revenues.

• Decreasing the balance of Retained Earnings by the amount of total expenses.

• Closing entries include all of the above.