Which of the Following Entries Will Be Necessary to Close

question 98

Multiple Choice

Which of the following entries will be necessary to close the insurance expense account at the end of the year?

• A)Debit Capital and credit Insurance expense
• B)Debit Insurance expense and credit Income summary
• C)Debit Income summary and credit Insurance expense
• D)Debit Insurance expense and credit Capital

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Definitions:

Elastic Demand

A situation in economics where the quantity demanded of a good or service changes significantly as its price changes.

Many Substitutes

Refers to a situation where numerous alternative products or services are available for consumers, often leading to competitive markets.

Inelastic Demand Curve

A demand curve that shows a small change in quantity demanded despite large changes in price, indicating consumers' necessity or lack of substitutes.

Motor Vehicles

Wheeled vehicles that are motorized or mechanically propelled, used for transportation of people, goods, or both.