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

question 147

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 Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
• D)Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
• E)Debit Cash, $7,750; credit Prepaid Insurance, $7,750.

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Definitions:

Division

A mathematical operation where one number (the dividend) is divided by another (the divisor), showing how many times the divisor fits into the dividend.

Division

A mathematical operation that represents dividing one number by another.

Polynomial

A mathematical expression consisting of variables and coefficients, that involves only the operations of addition, subtraction, multiplication, and non-negative integer exponents.

Factor

A number that divides another number exactly, without leaving a remainder, or the process of breaking down expressions into simpler components that can be multiplied together.