What Is the Proper Adjusting Entry at June 30 the End

question 196

Multiple Choice

What is the proper adjusting entry at June 30 the end of the fiscal year based on a prepaid insurance account balance before adjustment $15400 and unexpired amounts per analysis of policies of $5000?

• A) Debit Insurance Expense $5000; Credit Prepaid Insurance $5000.
• B) Debit Insurance Expense $15400; Credit Prepaid Insurance $15400.
• C) Debit Prepaid Insurance $10400; Credit Insurance Expense $10400.
• D) Debit Insurance Expense $10400; Credit Prepaid Insurance $10400.

---

Definitions:

Activity-based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of activities.

Overhead Cost

General expenses related to the operation of a business that are not directly tied to a specific product or service, including rent, utilities, and administrative expenses.

Supporting Assembly

Components or sub-assemblies that are used as part of a main assembly in manufacturing processes.

Activity-based Costing

A financial approach that distributes overhead and indirect charges to associated goods and services based on the activities involved.