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

question 117

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.

---

Definitions:

Online Retail Purchases

Purchases of goods and services made over the internet.

Direct Selling

A retail channel for selling products or services directly to consumers in a non-retail environment, usually through personal sales presentations at home or in the workplace.

Avon

Avon is a direct-selling company specializing in beauty, household, and personal care products.

Online Retailers

Businesses that sell goods or services over the internet to consumers, often through websites or mobile applications.