A company shows a 770 balance in Prepaid Rent in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired rent of 285. This adjusting entry results in: Multiple Choice 285 of prepaid Insurance. 285 decrease in net income. An error in the financial statements. 285 difference between the debit and credit columns of the Unadjusted Trial Balance. 285 increase in net income.

The adjusting entry for expired rent involves recognizing the expense that has been incurred during the period. In this case, the expired rent of $285 needs to be recorded as Rent Expense, which will decrease net income.<br /><br />Here's how the adjusting entry would look:<br /><br />- Debit Rent Expense: $285<br />- Credit Prepaid Rent: $285<br /><br />This adjustment decreases the Prepaid Rent asset account and increases the Rent Expense account, which in turn reduces net income by $285.<br /><br />Therefore, the correct choice is:<br /><br />\$ 285 decrease in net income.