What Is the Proper Adjusting Entry at December 31, the End

question 64

Multiple Choice

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

• A) Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
• B) Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
• C) Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
• D) Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.
• E) Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.

---

Definitions:

Inverse Function

A function that reverses the effect of the original function, swapping the roles of inputs and outputs.

Function

A mathematical relationship in which each input value has exactly one output value.

Horizontal Line Test

A method used to determine if a function is injective or one-to-one, based on whether any horizontal line intersects the graph more than once.

One-to-One

A function for which every element of the range of the function corresponds to exactly one element of the domain.