Which of the Following Correctly Describes the Effects of Recording

question 128

Multiple Choice

Which of the following correctly describes the effects of recording prepaid insurance when cash is paid to purchase an insurance policy?

• A)Total assets do not change.
• B)Net income decreases.
• C)Liabilities are decreased.
• D)Stockholders' equity decreases.

---

Definitions:

Entrepreneurial Faculties

The skills, abilities, and mindset required to successfully identify opportunities, create, and grow new business ventures, including creativity, leadership, and risk tolerance.

Rapid Explosion

A sudden and rapid increase or expansion in a particular area or field, often used to describe quick growth in technology, population, or information.

Entrepreneurship

Entrepreneurship is the act of creating, managing, and running a new business or venture, taking on financial risks in the hope of making a profit.

Small Firms

Businesses characterized by a small number of employees, low revenue, or limited market share.