A company using the accrual basis of accounting pays for one year of rent in advance.The entry to record this payment will involve a debit to:

Question

Quizplus · Accepted Answer

The entry to record the payment of rent in advance involves debiting the Prepaid Rent account, which is an asset account that represents the rent paid in advance. This asset account will be expensed over the course of the year as Rent Expense through the process of accrual accounting. Therefore, options A, B, and D are incorrect.

A Company Using the Accrual Basis of Accounting Pays for One