A transaction has been recorded in the T-accounts of Powell Corporation as follows:

Which of the following reflects how this event affects the company's financial statements?

A)Option A
B)Option B
C)Option C
D)Option D

Question

A transaction has been recorded in the T-accounts of Powell Corporation as follows:

Which of the following reflects how this event affects the company's financial statements?

A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

A debit to rent expense increases expenses,decreases net income,and decreases stockholders' equity (retained earnings).A credit to prepaid rent decreases assets.The event does not affect cash flows.

A Transaction Has Been Recorded in the T-Accounts of Powell