A deferral adjusting entry that adjusts assets (such as prepaids and supplies):
A)decreases total assets because cash is paid at the time of the adjustment.
B)expenses the amount used during the period.
C)increases total assets because costs are incurred.
D)increases total assets because cash will be received in the future.

Question

Quizplus · Accepted Answer

This type of deferral adjustment involves reducing an asset on the balance sheet and increasing an expense account on the income statement.

A Deferral Adjusting Entry That Adjusts Assets (Such as Prepaids