The January 1, 2019, Balance in the Prepaid Insurance Account $$\begin{array} { | r | r | } \hline \text { Pr. Insurance Expense } & 1,575 \\\hline \text { Cr. Prepaid Insurance } & 1,575 \\\hline\end{array}$$

question 10

Multiple Choice

The January 1, 2019, balance in the Prepaid Insurance account was $3,150 and represented the unexpired portion of a two-year policy purchased October 1, 2018. What is the required year-end adjusting journal entry on December 31, 2019?

• A) \[\begin{array} { | r | r | }
• \hline \text { Pr. Insurance Expense } & 1,575 \\
• \hline \text { Cr. Prepaid Insurance } & 1,575 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | }
• \hline \text { Pr. Insurance Expense } & 1,800 \\
• \hline \text { Cr. Prepaid Insurance } & 1,800 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | }
• \hline \text { Dr. Prepaid Insurance } & 1,575 \\
• \hline \text { Cr. Insurance } & 1,575 \\
• \text { Expense } & \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | l | }
• \hline \text { Dr. Prepaid Insurance } & 3,150 \\
• \hline \text { Cr. Insurance } & \\
• \text { Expense } & 3,150 \\
• \hline
• \end{array}\]

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Definitions:

Political Corruption

The misuse of public power or position for personal gain, undermining the integrity and fairness of political processes.

Public Choice Theory

The economic analysis of government decision making, politics, and elections.

Government Failure

A situation where government intervention in the economy creates inefficiencies and leads to a misallocation of resources.

Unfunded Liability

Obligations or debts for which sufficient funds have not been set aside, particularly relevant in the context of pensions and benefits.