On April 1, 2016, the premium on a one-year insurance policy was purchased for $3,000 cash with the insurance coverage beginning on that date. The books are adjusted only at year-end. Which of the following correctly describes the effect on the financial statements of the December 31, 2016 adjusting entry?
A) Prepaid insurance will decrease $750.
B) Insurance expense will increase $750.
C) Insurance expense will increase $2,250.
D) Prepaid insurance will increase $2,250.
Correct Answer:
Verified
Q23: Which is the correct sequence of the
Q25: The year-end closing process transfers net income
Q26: Closing the expense and loss accounts at
Q28: At the end of the accounting period,the
Q32: Which of the following journal entries is
Q33: Morgan Company used supplies in the amount
Q34: At the end of the accounting period,the
Q35: Accounts that retain their balance from one
Q37: Which is the correct order of the
Q39: Which of the following is a false
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents