Please advise what the correct answers are. A prepayment is originally recorded

Question

Please advise what the correct answers are.

A prepayment is originally recorded as an asset. tater, at the end of the accounting period, an adjustment is recorded causing a(n) account. in the asset account and an) in the expense decrease, increase increase; decrease decrease; decrease increase; increase Which of the following situations would cause the balance per bank to be more than the balance per books? deduct the amount of the outstanding checks from the balance per books. add the amount of the outstanding checks to the balance per bank. add the amount of the outstanding checks to the balance per books. deduct the amount of the outstanding checks from the balance per bank. Internal users of financial data include: investors management. creditors regulatory authorities. Which of the following would not represent a financing activity? An investment of capital by the owners. Payment of interest on a loan Borrowing money from a bank to purchase new equipment. Paying dividends to stockholders.

Explanation / Answer

Question :1

Answer:

Increase in the asset account and

Decrease in the expenses account

Since prepaid expenses are related to next accounting period for the purpose of finding accurate profits of the current period prepaid expenses are deducted from curent period expenses and the same should be present as an asset in the balancesheet.

Question :2

Answer: deduct the amount of outstanding checks from the balance of per books

Question :3

Answer : internal users of financial data includes

Management

Investors ,creditors and regulatory authories are external users to the financial data . Management is one of the internal users of financial information, which is important for decision making .

Question 4:

Answer : An investment of capital by the owner is not represent Financing activity.

Since payment of interest ,paying dividends and borrowing money from a bank are purely financing activities and the above investment by the owner is purely investing activity.

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