Asked by Lourdes Orellana on Apr 29, 2024
Verified
Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. Which of the following amounts would be recorded as insurance expense during the adjusting process at the end of Diane's first month of operations on March 31?
A) $8,400
B) $840
C) $700
D) $7,700
Insurance Expense
The cost recognized in the accounting period related to the premiums paid for insurance policies.
Liability Insurance Policy
A financial product that provides the insured party with protection against claims resulting from injuries and damage to people and/or property.
Prepaid Expense
Expenses paid in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are actually consumed.
- Conduct the process of refining and terminating entries for accounts of income, outgoings, and dividends.
Verified Answer
Learning Objectives
- Conduct the process of refining and terminating entries for accounts of income, outgoings, and dividends.
Related questions
Which of the Following Accounts Should Be Closed to Retained ...
The Journal Entry to Close the Fees Earned, $750, and ...
Beginning Inventory Is Adjusted by Debiting Merchandise Inventory and Crediting ...
Online Service Received Its Telephone Bill for January, but Is ...
It's the End of the Accounting Period and No Electric ...