On November 1, 2010, the Morrison Company Purchased a Two-Year $\begin{array} { c c } \text { Insurance Expense } & 250 \\\text { Prepaid Insurance } & 250\end{array}$

question 9

Multiple Choice

On November 1, 2010, the Morrison Company purchased a two-year umbrella insurance policy for $3, 000 and recorded the transaction by debiting Prepaid Insurance and crediting Cash.Which of the following adjusting entries would be used by Morrison to properly account for prepaid insurance on December 31, 2010?

• A)
• \(\begin{array} { c c }
• \text { Insurance Expense } & 250 \\
• \text { Prepaid Insurance } & 250
• \end{array}\)
• B)
• \(\begin{array}{lr}
• \text { Prepaid Insurance } & 2,750 \\
• \text { Insurance Expense } & 2,750
• \end{array}\)
• C)
• Insurance Expense \( \quad 250 \)
• Accumulated Amortization-Insurance \( \quad 250 \)
• D)
• \(\begin{array}{lc}
• \text { Prepaid Insurance } & 1,250 \\
• \text { Cash } & 1,250
• \end{array}\)

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Definitions:

Simultaneous Experience

Experiencing two or more sensory inputs or cognitive processes at the same time.

Learning Occur

The process of acquiring new understanding, knowledge, behaviors, skills, values, attitudes, and preferences.

Guthrie

Refers to Edwin Ray Guthrie, a psychologist known for his "one trial learning" theory, emphasizing the importance of contiguity in learning.

Guthrie

Refers to Edwin Ray Guthrie, a psychologist known for his theory that learning is based on a stimulus-response association.