when an adjustment is made for prepaid rent:\n\na. a liability decreases and an expense decreases.\nb. an…

when an adjustment is made for prepaid rent:\n\na. a liability decreases and an expense decreases.\nb. an asset decreases and an expense increases.\nc. an asset increases and an expense decreases.\nd. one asset increases and another decreases.

when an adjustment is made for prepaid rent:\n\na. a liability decreases and an expense decreases.\nb. an asset decreases and an expense increases.\nc. an asset increases and an expense decreases.\nd. one asset increases and another decreases.

Answer

Brief Explanations:

Prepaid rent is an asset. When an adjustment is made for prepaid rent, it means the rent has been used (expired). So, the asset (prepaid rent) decreases as it is being consumed, and the rent expense (which is an expense account) increases because the cost is now recognized as an expense for the period.

Answer:

B. an asset decreases and an expense increases.