A Company Shows a $600 Balance in Prepaid Rent in the Unadjusted

Multiple Choice

A company shows a $600 balance in Prepaid Rent in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired rent of $200. This adjusting entry results in:

A) $200 of prepaid insurance.
B) $200 difference between the debit and credit columns of the Unadjusted Trial Balance.
C) An error in the financial statements.
D) $200 decrease in net income.
E) $200 increase in net income.