A prepayment is originally recorded as an asset Later at the

A prepayment is originally recorded as an asset. Later, at the end of the accounting period, an adjustment is recorded causing a(n) ______ in the asset account and a(n) ______ in the expense account.

decrease, increase

decrease; decrease

increase; increase

increase; decrease

Solution

Decrease ; increase

for examplye prepaid rent , when adjustment is recorded the prepaid rent will be decreased with the amount of rent to be expensed,thus there will be increase of expense