Which of the Following Is the Proper Adjusting Entry, Based

question 185

Multiple Choice

Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000, for the fiscal year ending on April 30?

• A) debit Insurance Expense, $3,000; credit Prepaid Insurance, $3,000
• B) debit Insurance Expense, $14,000; credit Prepaid Insurance, $14,000
• C) debit Prepaid Insurance, $11,000; credit Insurance Expense, $11,000
• D) debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,000

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Definitions:

Economic Situation

The state of the economy at a given time, influenced by factors such as GDP, unemployment rates, and inflation.

Profitability

A measure of the efficiency and financial performance of a business, indicating its ability to generate income relative to revenue, assets, or equity.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

Voting Shares

Shares that give the shareholder the right to vote on company matters at shareholder meetings.