What Is the Proper Adjusting Entry at December 31, the End

question 117

Multiple Choice

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

• A) Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
• B) Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
• C) Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
• D) Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
• E) Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

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Definitions:

High-Prevalence Regions

Areas or regions where a particular disease or condition is found more frequently than in other regions.

\(\beta\)-Adrenergic Agonists

Medications that stimulate beta-adrenoceptors in the heart, lungs, and other tissues, with effects such as relaxing airway muscles or increasing heart rate.

Methylxanthines

A class of chemicals including caffeine, theobromine, and theophylline, found in coffee, tea, and cocoa, used medically to relax bronchial muscles.

Asthma Attack

A sudden worsening of asthma symptoms caused by the tightening of muscles around the airways, leading to difficulty in breathing.