A Company Shows an $800 Balance in Prepaid Insurance in the Unadjusted

question 54

Multiple Choice

A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $600. This adjusting entry results in

• A) $600 less profit
• B) $600 more profit
• C) $200 difference between the debit and credit columns of the unadjusted trial balance
• D) $400 in the Income Statement Debit column on the work sheet
• E) $400 in the Balance Sheet Credit column on the work sheet