What is the impact on profit and net assets of making the year-end adjustments for deferred income and prepayments at 30 September 20X9? Profit Net assets A. Decrease of $500 Increase of $500 B. Decrease of $1,000 Increase of $1,000 C. Decrease of $500 Decrease of $500 D. Increase of $1,000 Increase of $1,000
During the year ended 30 September 20X9, H recorded the following cash transactions:
(1) A payment of an annual insurance premium of $6,000. This covered the period to 31 December 20X9.
(2) Receipt of $3,000 in respect of rent from a tenant covering the three-month period to 30 November 20X9.
What is the impact on profit and net assets of making the year-end adjustments for deferred income and prepayments at 30 September 20X9?
Profit Net assets
A. Decrease of $500 Increase of $500
B. Decrease of $1,000 Increase of $1,000
C. Decrease of $500 Decrease of $500
D. Increase of $1,000 Increase of $1,000
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