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To Take Advantage of a Zero Percent Rent Increase for the Coming

Question 25

Multiple Choice

To take advantage of a zero percent rent increase for the coming year, a company paid, at year-end, $150,000 rent for the first three months of the next year.
What would the effect of this transaction on the company's year-end accounting equation?


A) No effect on Assets; $150,000 decrease in Liabilities; $150,000 increase in Stockholders' Equity
B) $150,000 increase in Assets; $150,000 increase in Liabilities; No effect on Stockholders' Equity
C) $150,000 increase in Assets; No effect on Liabilities; $150,000 increase in Stockholders' Equity
D) No effect on Assets; No effect on Liabilities; No effect on Stockholders' Equity

Correct Answer:

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