Early in 2018, Ashland Granite Discovered That a Five-Year Insurance

question 50

Multiple Choice

Early in 2018, Ashland Granite discovered that a five-year insurance premium payment of $750,000 at the beginning of 2015 was debited to insurance expense. The correcting entry would include:

• A) A debit to prepaid insurance of $750,000.
• B) A debit to insurance expense of $300,000.
• C) A debit to prepaid insurance of $450,000.
• D) A credit to retained earnings of $300,000.

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Definitions:

MS-DOS

Microsoft Disk Operating System, an early command-line operating system for IBM PC-compatible computers.

WordPerfect

A word processing software that has been widely used for document creation, editing, and formatting, known for its reveal codes feature.

Floppy Disk

A type of disk storage composed of a disk of thin and flexible magnetic storage medium, enclosed in a square or rectangular plastic shell.

Mechanical Calculator

An early computing device used for performing mathematical operations that operates through mechanical components like gears and levers.