A Company Reported an Increase in Prepaid Rent and an Increase

A company reported an increase in prepaid rent and an increase in accrued liabilities during 2010.Which of the following statements is correct?

A) When determining cash paid for operating expenses, both the increase in prepaid rent and the increase in accrued liabilities are deducted from operating expenses.
B) When determining cash paid for operating expenses, both the increase in prepaid rent and the increase in accrued liabilities are added to operating expenses.
C) When determining cash paid for operating expenses, the increase in prepaid rent is added to operating expenses and the increase in accrued liabilities is deducted from operating expenses.
D) When determining cash paid for operating expenses, the increase in prepaid rent is deducted from operating expenses and the increase in accrued liabilities is added to operating expenses.