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.

Question

Business

Cannon Livingston

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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Answers (1)

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Nash Wolfe · Answer 1

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.