Understanding Prepaid Expenses and Their Impact on Financial

Question 13 1 l 1 pts When a prepaid expense is initially debited to an expense account, expenses and assets are both overstated prior to adjustment. Correct! Question 14 Expenses paid and recorded as assets before they are used are called Correct! ' prepaid expenses. accrued expenses. interim expenses. unearned EXPENSES. Question 15 1 I 1 pts At March 1, Payday Inc. reported a balance in Supplies of $250. During March, the company purchased supplies for $800 and consumed supplies of $700. If no adjusting entry is made for supplies Correct! ' owner's equity will be overstated by $700. net income will be understated by $700. expenses will be understated by $800. assets will be understated by $150.