If the Prepaid Insurance account had an unadjusted normal balance of $3,400, and an adjustment was made crediting the account for $800, then the account would appear on the work sheet as a(n)
A)$2,600 debit balance in the Balance Sheet columns.
B)$800 credit balance in the Income Statement columns.
C)$2,600 credit balance in the Adjusted Trial Balance columns.
D)$800 credit balance in the Balance Sheet columns.
E)$2,600 debit balance in the Income Statement columns.

Question

Quizplus · Accepted Answer

The Prepaid Insurance account initially has a debit balance of $3,400. After an adjustment crediting the account for $800, the new balance is $3,400 - $800 = $2,600 debit. This balance would appear in the Balance Sheet columns as a debit balance.

If the Prepaid Insurance Account Had an Unadjusted Normal Balance