Question

​Saturn, Inc. paid the rent for the current month in cash. Which of the following accounts will be used to record the​ transaction?
A) Prepaid RentB) Rent PayableC) Rent RevenueD) Rent Expense

Answer 1

Answer:

D) Rent Expense

Explanation:

As per the principles of accounting we follow the accrual principal, where the expense for a period when accrued is accounted for, even if not paid a liability is created. Here, there is payment of rent for the current month in cash, there is nothing due, it is actually paid, since it is paid only for the current month there is nothing paid in advance that shall be debited to prepaid rent. Therefore, the provided rent paid for the current month will be considered as expense for the period and charged as rent expense.

Thus, correct option is

D) Rent Expense