The Clipper, Inc., uses the accrual basis of accounting.Clipper's rent expense account had a $14, 000 balance at the end of the year.The prepaid rent account had a $5, 000 balance at the beginning of the year and a $7, 000 balance at the end of the year.How much cash was paid for rent during the year?

Question

Quizplus · Accepted Answer

The cash paid for rent is calculated by adding the rent expense to the increase in prepaid rent, then subtracting any prepaid rent amount at the beginning of the year. So, $14,000 + $7,000 - $5,000 = $16,000.