The Lazarus Company recorded the following adjustment in general journal form: Which of the following choices accurately reflects how this event would affect the company's financial statements?
A)Option A
B)Option B
C)Option C
D)Option D

Question

The Lazarus Company recorded the following adjustment in general journal form:  Which of the following choices accurately reflects how this event would affect the company's financial statements? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The adjusting entry to recognize rent expense increases rent expense, which decreases net income and equity, and decreases prepaid rent (an asset). As with all adjusting entries, it does not affect cash flows.

The Lazarus Company Recorded the Following Adjustment in General Journal