For a prepaid expense, the adjusting entry would
A) Result in a debit to an expense account and a credit to an asset account
B) Cause a prepaid expense to be overstated and liabilities to be understated
C) Result in a credit to an expense account and a debit to an asset account
D) Result in a debit to a liability account and a credit to an asset account
E) Decrease cash

Question

Quizplus · Accepted Answer

Adjusting entries for prepaid expenses involve debiting the relevant expense account to recognize the expense incurred during the period and crediting the prepaid expense asset account to reduce its balance, reflecting the portion of the prepaid amount that has been used up.

For a Prepaid Expense, the Adjusting Entry Would