The amount of the month-end adjusting entry for Insurance Expense is $1,000. If the entry is not made then expenses are understated by $1,000 and profit is overstated by $1,000.

Question

Quizplus · Accepted Answer

This is because the $1,000 expense would not have been recognized in the current accounting period, resulting in expenses being understated and profit being overstated.

The Amount of the Month-End Adjusting Entry for Insurance Expense