The entry to close the appropriate insurance account at the end of the accounting period is
A)debit Retained Earnings; credit Prepaid Insurance
B)debit Prepaid Insurance; credit Retained Earnings
C)debit Insurance Expense; credit Retained Earnings
D)debit Retained Earnings; credit Insurance Expense

Question

Quizplus · Accepted Answer

At the end of the accounting period, the insurance expense account is closed to retained earnings. This is done by debiting Retained Earnings and crediting Insurance Expense to transfer the expense to the equity section of the balance sheet.

The Entry to Close the Appropriate Insurance Account at the End