Harrod Company paid $4,800 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $4,800 and no adjustments had been made previously. The adjusting entry required on December 31 is:
A. Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400.
B. Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.
C. Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200.
D. Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.
E. Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200.
Answer: B
You might also like to view...
Characterize psychographic segmentation
What will be an ideal response?
Datasets that are too large and complex for businesses' existing systems utilizing traditional capabilities are referred to as big data.
Answer the following statement true (T) or false (F)
Five years ago, the Paradise Surf Shop was the only surf-gear store catering to women. It carried everything the serious female surfer needed to ride the waves. In terms of its merchandise assortment, it had a ________ assortment
A) shallow and deep B) narrow and deep C) shallow and broad D) broad and deep E) shallow and narrow
______ theory suggests that manager will act in the way that provides the most benefit to them and not the owners of the organization, unless they are provided with incentives to act in ways that help the owners of the organization.
A. Variable B. Executive C. Agency D. Loafer