On July 31, 2018, a company purchased a two-year insurance policy for $27,000, paying cash and debiting Prepaid Insurance for the entire two-year premium amount. The adjusting entry on December 31, 2018 includes a:
A. debit to Prepaid Insurance $6,750.
B. credit to Prepaid Insurance $5,625.
C. credit to Insurance Expense $5,625.
D. debit to Insurance expense $6,750.
Answer: B
You might also like to view...
Research has summarized studies that had investigated whether emotional intelligence/competence is related to leadership emergence, leadership behaviors, and overall leadership effectiveness. This research found:
a. Emotional intelligence/competency is only related to leadership emergence b. Emotional intelligence/competency is only related to leadership behaviors c. Emotional intelligence/competency is only related to leadership effectiveness d. Emotional intelligence/competency is important to leadership emergence, to performing effective leadership behaviors, and to overall leadership effectiveness
In Matrixx Initiatives v. Siracusano case referenced in the text, the U.S. Supreme Court analyzed the question of whether an issuer must disclose known information about possible side effects of a drug that could affect the drug's stock price even though no proven statistical link exists between use of the drug and the adverse effect. The Court held:
a. that a bright-line test would be applied requiring at least one civil judgment in favor of a plaintiff before a defendant would be required to disclose allegations of a link between a drug and an adverse effect and that the defendants were entitled to dismissal of the case because no showing of a civil judgment had been introduced. b. that no statistical link between the use of the drug and adverse effects was required but that the defendants were entitled to dismissal of the case because the plaintiffs did not personally suffer adverse health effects from the drug. c. that the defendants were entitled to dismissal of the case because the plaintiffs could not prove a statistical link between use of the drug and adverse effects. d. that the "total mix of information" test applied in regard to the issue of materiality, that statistical proof was unnecessary, and that sufficient evidence existed for the plaintiffs to proceed to trial.
The volume variance is nonzero whenever:
A. standard hours allowed for the output of a period differ from the actual hours during the period. B. actual hours differ from the denominator level of activity. C. standard hours allowed for the output of a period differ from the denominator level of activity. D. actual fixed manufacturing overhead costs incurred during a period differ from budgeted fixed manufacturing overhead costs as contained in the flexible budget.
While Chebysheff's Theorem applies to any distribution, regardless of shape, the Empirical Rule applies only to distributions that are bell shaped
Indicate whether the statement is true or false