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:

Authenticate

The process of proving or validating the authenticity of something, often through verification of its origin or identity.

Electronic Document

A document that is produced, stored, and transmitted in a digital format.

Requirement Of Written Documents

Legal stipulation that certain agreements, contracts, or transactions be documented in writing to be enforceable or valid.

Consideration

The value (such as money, service, or goods) promised to another when making a contract.