Safety First Supply Company Purchased a 5-Year Insurance Policy for $2,900

question 36

Multiple Choice

Safety First Supply Company purchased a 5-year insurance policy for $2,900. What would the adjusting entry be at the end of the first year?

• A)Debit Insurance Expense $2,900, credit Prepaid Insurance $2,900
• B)Debit Insurance Expense $2,900, credit Cash $2,900
• C)Debit Insurance Expense $580, credit Prepaid Insurance $580
• D)Debit Insurance Expense $580, credit Cash $580

---

Definitions:

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of reporting periods, or of different companies during the same period.

Certain Date

A specific, determined point in time, often mentioned in contracts and agreements.

Percentage Increase

A measure expressed as a percentage that represents the magnitude of an increase in a value or quantity compared to its original value.