Which of the Following Entries Records the Payment of Insurance

question 5

Multiple Choice

Which of the following entries records the payment of insurance for the current month?

• A) Cash, debit; Insurance Expense, credit
• B) Insurance Expense, debit; Cash, credit
• C) Insurance Expense, debit; Accounts Receivable, credit
• D) Prepaid Insurance, debit; Cash, credit

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Definitions:

Defect Of Title

A legal issue with the title to a property that may prevent a seller from providing clear ownership, affecting the ability to sell or transfer the property.

Personal Defences

Legal arguments used by individuals in court to justify their actions or to deny liability.

Holder In Due Course

A person who acquires a negotiable instrument before its due date that is complete and regular on its face, and who gave value for the instrument, without any knowledge of default or defect in the title of prior holders.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the name of the payer and payee.