Use This Information to Answer the Following Question

question 112

Multiple Choice

Use this information to answer the following question. The trial balance for Sanchez Company appears as follows:
If on December 31, 2010, the insurance still unexpired amounted to $20, the adjusting entry would contain a

• A) debit to Prepaid Insurance for $30.
• B) credit to Prepaid Insurance for $30
• C) debit to Insurance Expense for $20.
• D) credit to Prepaid Insurance for $20.

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.

Profitable Projects

Projects that generate a financial gain or benefit exceeding their costs and investments.

Investment Centres

Divisions or units within an organization that are responsible for generating returns on the assets invested in them.

Residual Income

The amount of net income left over for a business after it has paid out dividends to its shareholders, often used as a measure of corporate and project profitability.