Ask Question
BusinessBusiness
30 January, 23:21

A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in: Select one: a. $200 decrease in net income. b. $200 increase in net income. c. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. d. $200 of prepaid insurance. e. An error in the financial statements.

+2
Answers (1)
  1. 31 January, 01:31
    0
    a. $200 decrease in net income.

    Explanation:

    When insurance is paid in advance, the entries required are;

    Debit Prepaid Insurance

    Credit Cash account

    As time elapses and the insurance expires,

    Debit Insurance expense

    Credit Prepaid Insurance

    Given that the Adjustments columns show expired insurance of $200, this will be recorded as an expense and will thus decrease the net income.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
The Federal Housing Administration (FHA) insures loans for lenders of real property. Which statement about FHA loans is false? 1. FHA mortgages require a larger downpayment than vA loans 2. There is no prepayment penalty 3.
Answers (1)
Discuss how either good or poor quality affects you personally as a customer. Give specific examples and describe an experience in which your expectations were met exceeded. or not met when you purchased goods or services.
Answers (1)
A project will produce an operating cash flow of $14,600 a year for 7 years. the initial fixed asset investment in the project will be $48,900.
Answers (1)
When a purchasing agent for intel is offered a bribe by a silicon manufacturer salesperson, a. a promotion-related ethical issue has been created. b. the purchasing agent is free to accept the bribe without consequences. c.
Answers (1)
A 12-month insurance policy was purchased on Dec. 1 for $3,600 and the Prepaid insurance account was increased for the payment. 14 - Demonstrate the required adjusting journal entry on Dec. 31 by selecting from the choices below. a.
Answers (1)
New Questions in Business
A firm has three different production facilities, all of which produce the same product ... While reviewing the firm's cost data, Jasmin, a manager, discovers that one of the plants has a higher average cost than the other plants and suggests
Answers (1)
Five jobs are waiting to be processed. Their processing times and due dates are given below. Using the shortestprocessing time dispatching rule, in which order should the jobs be processed?
Answers (1)
Acme Foods wants to make its chips saltier, but it doesn't want to spend more than it has to on salt. A sample of consumers are asked to compare its current chip (saltiness = 100) with saltier versions and to say whether the new version is saltier.
Answers (1)
Which of the following comparisons best isolates the impact of a change in activity on performance?
Answers (1)
If an investor anticipates an annual rental income from a leased property to be $400,000 dollars, this expected sum has a direct bearing on what the investor will pay for the property. This is an example of
Answers (1)
Home » Business » A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in: Select one: a. $200 decrease in net income. b.
Sign Up Forgot Password?