The Adjusting Entry to Record the Amount of Prepaid Insurance

question 39

Multiple Choice

The adjusting entry to record the amount of prepaid insurance used or expired would involve a

• A) debit to Prepaid Insurance.
• B) credit to Cash.
• C) credit to Insurance Payable.
• D) debit to Insurance Expense.

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Definitions:

Sports Bar

A bar or tavern that provides a venue for people to watch sporting events, often equipped with multiple large-screen televisions.

Normal Return

The minimum profit needed by investors to justify the capital invested in a business venture, often equated to the opportunity cost.

Total Revenue

Total Revenue is the total amount of money received by a firm from sales of goods or services before any expenses are deducted.

Economic Profit

The contrast between cumulative revenue and cumulative costs, taking into account both clear and veiled expenses.