Which Account Is Debited in the Adjusting Entry to Record

question 78

Multiple Choice

Which account is debited in the adjusting entry to record insurance expired during the current period?

• A)Insurance Payable
• B)Accrued Insurance
• C)Prepaid Insurance
• D)Insurance Expense

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Definitions:

Warranty Expenses

Costs that a company anticipates for repairing or replacing defective products sold to customers under warranty.

Net Sales

Net sales are the total revenue from goods or services sold by a company, after deducting returns, allowances for damaged or missing goods, and discounts.

Sales Warranty Accrual Method

A method used in accounting to set aside a portion of sales revenue to cover future warranty claims, ensuring that warranty expenses are matched with related sales in the same period.

Warranty Expense

The estimated cost of honoring product warranties, recognized as an expense by companies.