Explain the possible effects on the balance sheet

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Problem 1: A company had not delayed booking expenses in prior periods. However, to inflate income, the company delays booking expenses in the current period. Pick one of the choices below that describes the possible effects on the balance sheet at the end of the current period.

a. Increase prepayments [an asset] or increase payables [a liability]
b. Increase prepayments [an asset] or decrease payables [a liability]
c. Decrease prepayments [an asset] or increase payables [a liability]
d. Decrease prepayments [an asset] or decrease payables [a liability]

Reference no: EM132976704

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