Which of the following transactions and events results in a decrease in both total assets and net income?

  1. Recognising previously recorded deferred revenue as revenue.
  2. Collecting cash from an account receivable.
  3. The accrual of wages expense at year-end.
  4. Adjustment of the prepaid rent account for rent used during the period.

Answer d. Adjustment of the prepaid rent account for rent used during the period

Explanation: A prepaid cost is a kind of resource on the monetary record that results from a business making settlements ahead of time, for services and products to be gotten later on. Prepaid costs are at first recorded as assets, yet their worth is discounted over the long run onto the income statement.

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