The Adjustment to Journalize an Additional Premium Due at the End

question 24

Multiple Choice

The adjustment to journalize an additional premium due at the end of the year for workers' compensation insurance (WCI) is

• A) debit WCI Expense and credit Cash.
• B) debit WCI Expense and credit Insurance Refund.
• C) debit WCI Expense and credit WCI Payable.
• D) debit Insurance Payable and credit WCI Payable.

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Definitions:

Bondholder's Risk

The risk that a bond issuer will default, resulting in the loss of both periodic interest payments and the principal investment to the bondholder.

Registered Bonds

Bonds that are recorded in the name of the holder on the issuing company's books, ensuring that only the registered holder receives interest payments.

Term Bonds

Bonds that have a fixed maturity date on which the principal amount of the bond is due to be paid.