The unadjusted trial balance shows a $12,000 balance for Prepaid Rent.At the end of the year,$7,000 of the rent had been used.The adjusted trial balance reflects a balance for Prepaid Rent of:
A)$5,000 debit.
B)$5,000 credit.
C)$7,000 debit.
D)$7,000 credit.

Question

Quizplus · Accepted Answer

The original balance of $12,000 in Prepaid Rent represents the amount paid in advance. Since $7,000 of the rent has been used, the remaining balance should be $12,000 - $7,000 = $5,000. Prepaid Rent is an asset account, so it should have a debit balance.

The Unadjusted Trial Balance Shows a $12,000 Balance for Prepaid