On January 1,2011,Ryan Company Paid the Premium on a Three-Year

question 49

Multiple Choice

On January 1,2011,Ryan Company paid the premium on a three-year insurance policy in the amount of $6,000.At that time,the full amount paid was recorded as prepaid insurance.After recording the adjusting entry for the insurance policy on December 31,2011,Ryan Company's records would reflect what balance in the prepaid insurance account?

• A)$6,000
• B)$2,000
• C)$3,000
• D)$4,000

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Definitions:

English Economist

An English Economist refers to an economist from England who specializes in the study of economics, the social science concerned with the production, distribution, and consumption of goods and services.

Utility Theory

A theory in economics that assesses the usefulness or satisfaction a consumer gains from consuming goods and services.

Total Utility

The complete fulfillment experienced from the consumption of a specific amount of products or services.

Marginal Utility

The increased happiness or value a buyer experiences by consuming an extra unit of a good or service.