Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 44 - No. 9)
What is the impact on the income statement when a prepaid expense is adjusted?
The expense account is debited, decreasing the profit.
The expense account is debited, increasing the profit.
The expense account is credited, decreasing the profit.
There is no impact on the income statement.
Explanation
The expense is recognized (debited), which decreases profit.
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