In adjusting for a prepayment, the expense account needs to be ________ and an asset account needs to be ________.
A)set up; credited
B)set up; reduced
C)credited; debited
D)debited; credited

Question

Quizplus · Accepted Answer

In adjusting for a prepayment, the expense account is credited to reduce it, and an asset account (prepaid expense) is debited to increase it, reflecting the prepayment as an asset.

In Adjusting for a Prepayment, the Expense Account Needs to Be