Which of the Following Journal Entries Correctly Records Paying for a $900

question 60

Multiple Choice

Which of the following journal entries correctly records paying for a $900 one year insurance policy in advance?

• A) \(\begin{array} { | c | r | r | }
• \hline \text { Insurance expense } & 900 & \\
• \hline \text { Prepaid insurance } & & 900 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | c | r | r | }
• \hline \text { Prepaid insurance } & 900 & \\
• \hline \text { Insurance payable } & & 900 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | c | r | r | }
• \hline \text { Insurance expense } & 900 & \\
• \hline \text { Cash } & & 900 \\
• \hline
• \end{array}\)
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Prepaid insurance } & 900 & \\
• \hline \text { Cash } & & 900 \\
• \hline
• \end{array}\]

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Definitions:

Sensorimotor

Relating to or involving both sensory and motor functions or pathways, characterizing the first stage of cognitive development according to Piaget.

Perceptual Systems

The sensory systems involved in processing and interpreting information from the environment, such as vision, hearing, touch, taste, and smell.

Concrete Operational

A stage in Piaget's theory of cognitive development, occurring from about 7 to 12 years of age, where children gain the ability to think logically about concrete events.

Formal Operational

The stage in Piaget's theory of cognitive development where individuals are able to think abstractly, logically, and systematically.