An Example of an Adjusting Entry for a Prepaid Item

question 11

Multiple Choice

An example of an adjusting entry for a prepaid item using the QBO journal is:

• A) \[\begin{array} { l c c }
• &\text { Debit } & \text { Credit } \\
• \text { Insurance Expense } &\$ 1,000\\
• \text { Prepaid Insurance } & &\$ 1,000 & \\
• \end{array}\]
• B) \[\begin{array} { l c c }
• &\text { Debit } & \text { Credit } \\
• \text { Prepaid Insurance} &\$ 1,000\\
• \text { Insurance Expense } & &\$ 1,000 & \\
• \end{array}\]
• C) \[\begin{array} { l c c }
• &\text { Debit } & \text { Credit } \\
• \text { Insurance Expense} &\$ 1,000\\
• \text { Insurance Payable} & &\$ 1,000 & \\
• \end{array}\]
• D) \[\begin{array} { l c c }
• &\text { Debit } & \text { Credit } \\
• \text { Insurance Payable} &\$ 1,000\\
• \text { Insurance Expense } & &\$ 1,000 & \\
• \end{array}\]