In the case of a prepaid expense,the adjusting entry required at the end of a period consists of a credit to Prepaid expense.

Question

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At the end of a period, a prepaid expense account usually needs to be adjusted to reflect the amount of the expense that has been consumed or used during the period. This is done by making an adjusting journal entry that debits the expense account and credits the prepaid expense account by the same amount. Therefore, the statement that the adjusting entry required at the end of a period consists of a credit to prepaid expense is false.

In the Case of a Prepaid Expense,the Adjusting Entry Required