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15 December, 23:15

Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? (Select all that apply.)

A. A company records interest expense that has accrued, but will not be paid until next year.

B. A company pays a 6-month insurance premium at the beginning of October.

C. A company pays a utility bill for charges incurred in the previous month.

D. A company pays for 4 months of advertising in the Wall Street Journal on November 1.

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  1. 16 December, 01:20
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    Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? (Select all that apply.)

    B. A company pays a 6-month insurance premium at the beginning of October.

    D. A company pays for 4 months of advertising in the Wall Street Journal on November 1.

    Explanation:

    B. A company pays a 6-month insurance premium at the beginning of October.

    Record expenses for 3 months. Oct-nov-dec. Otrher 3 months are prepaid expenses.

    D. A company pays for 4 months of advertising in the Wall Street Journal on November 1.

    Record expenses for 2 months. Nov-Dec. Other 2 months are prepaid expenses.
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