The prepaid rent account has a balance that is $400 less in the worksheet's balance sheet debit column than in the worksheet's trial balance debit column. This would be the result of a:
A)$400 entry to prepaid rent in the worksheet's adjustments debit column.
B)$400 entry to prepaid rent in the worksheet's adjustments credit column.
C)$400 entry to rent expense in the worksheet's adjustments credit column.
D)mistake in cross-adding the worksheet.

Question

Quizplus · Accepted Answer

A decrease in the balance sheet debit column for prepaid rent compared to the trial balance debit column indicates an adjustment was made to allocate a portion of the prepaid rent to the current period's expense. This is achieved by crediting the prepaid rent account in the adjustments column, which reduces its balance, and debiting the rent expense account (not mentioned in the options but implied by the process).

The Prepaid Rent Account Has a Balance That Is $400