Question

Not recording the Prepaid Rent used causes
A. assets to be too high.
B. assets to be too low.
C. expenses to be too high.
D. revenue to be too high.

Answer 1

what kind of an account is prepaid rent?

Answer 2

im guessing rent that is paid in the beggining of the month. thats what we do

Answer 3

prepaid means that it hasnt been paid yet; its money we have accounted for that we havent spent yet.

it benefits us in the future ...

Answer 4

@amistre64 you pay rent for the next month for example we make a check of $1,300 every 27th of the month before the new one, then send it by mail, and it would get to the landord by the 29th

Answer 5

there for your assests are low because you just lost that $1,300

Answer 6

your logic is not accurate

Answer 7

in the beginning of the month.... idk if that make sense

Answer 8

Cash is removed and placed into Prepaid asset- to asset+

when the rent is due, Prepaid is removed, and expanse is accounted for:
asset- to expense+

if we fail to register the prepaid account when it gets used ... our asset does not reduce. its is therefore too _______

Answer 9

amistre, its common logic. .......... some landlords prefer is in the beginning or at the end of the month. my landlord prefers it in the beginning.

Answer 10

amistre is correct.