At the start of this year 18 months of rent was paid. At the year's end, how will this affect the balance sheet?
A) Assets will be decreased.
B) Liabilities will be increased.
C) Owner's Equity will be increased.
D) Net Income will be increased.

Question

Quizplus · Accepted Answer

Paying 18 months of rent in advance will decrease assets, specifically cash or cash equivalents, on the balance sheet since the payment is made upfront.

At the Start of This Year 18 Months of Rent