7) What is the definition of depreciation? A Depreciation is a special type of prepaid Item involving fixed assets and it is the allocation of an asset's cost over its useful life. B. Depreciation is a special type of accrued liability Item Irwalving fixed assets and it is the allocation of an asset's cost over its useful life. C. Depreciation is a special type of prepaid item involving revenues and it is the allocation of an asset's cost compared to revenue generated over its useful life. D. Depreciation is a special type of prepaid item involving a current prepaid asset and it is the allocation of the prepaid's cost over the asset's life. QUESTION 20 What is FALSE regarding prepaid items? A Prepaid adjustments typically decrease an expense and increase an asset B. Prepaids are items relating to expenses that have been paid in advance. C. Adjusting entries for prepaids affect an Expense account and an Asset account D. The adjusting entry records the amount that needs to be transferred between two accounts, an expense and an asset to show the amount of the asset that has been reduced or used QUESTION 21 Accrued expenses are: A expenses that have been paid but not yet incurred. 3. expenses incurred but not yet pald or recorded. expenses that require adjusting entries to increase a prepaid expense and decrease ality 0.expenses that require adjusting entries to debit alability and credit an expense