When existing assets are used up in the ordinary course of business:
A)an expense is recorded.
B)Deferred revenue is recorded.
C)an accrual is recorded.
D)a prepaid expense is recorded.

Question

Quizplus · Accepted Answer

When the company pays cash before incurring the expense,the prepayment is recorded in an asset account on the balance sheet.A deferral adjustment occurs when the asset is partially used up during the accounting period.The expense is incurred and recorded and the asset account is decreased.

When Existing Assets Are Used Up in the Ordinary Course