When a tenant makes an end-of-period adjusting entry credit to the "Prepaid rent" account:
A)(S)he usually debits cash.
B)(S)he usually debits an expense account.
C)(S)he debits a liability account.
D)(S)he does none of the above.

Question

Quizplus · Accepted Answer

When a tenant makes an end-of-period adjusting entry credit to the "Prepaid rent" account, it means that some portion of the prepaid rent has been consumed or used up during the period. This consumption should be recognized as an expense, and therefore, the tenant should debit an expense account. The credit entry will be made to the "Prepaid rent" account, which is a liability account.

When a Tenant Makes an End-Of-Period Adjusting Entry Credit to the "Prepaid