When an Adjusting Entry Is Made to Record Insurance Expense

question 34

Multiple Choice

When an adjusting entry is made to record insurance expense and reduce the prepaid insurance account, which section of the statement of cash flows is affected?

• A) Cash Flow from Operating Activities
• B) Cash Flow from Investing Activities
• C) Cash Flow from Financing Activities
• D) There is no effect on the statement of cash flows.

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Definitions:

75th Percentile

The value below which 75% of the data points in a dataset lie.

Q3

The third quartile in a data set, representing the value below which 75% of the data falls.

Q1

Stands for the first quartile in a data set, which is the median of the lower half of the data set.

Q2

Often refers to the median in the context of quartiles in descriptive statistics, which divides a data set into two equal parts.