As Prepaid Rent is used, the asset becomes a(n)
A) liability.
B) expense.
C) contra-asset.
D) revenue.

Name: As Prepaid Rent is used, the asset becomes a(n) A) liability. B) expense. C) contra-asset. D) revenue.
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Question

Quizplus · Accepted Answer

Prepaid rent is initially recorded as an asset because it provides future economic benefits. However, as the rent is used up (typically on a monthly basis), it becomes an expense that is recognized on the income statement. Therefore, the correct answer is B – expense.

As Prepaid Rent Is Used, the Asset Becomes A(n)