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Suppose That a Business Purchases a 6-Month General Liability Insurance

Question 72

Multiple Choice

Suppose that a business purchases a 6-month general liability insurance policy for $24,000 on January 1. To record this transaction, the company debits "Prepaid Insurance" for $24,000 and credits "Cash" for $24,000. As of January 31, the company has consumed one month of insurance. What adjusting entry is necessary at January 31?


A)
Suppose that a business purchases a 6-month general liability insurance policy for $24,000 on January 1. To record this transaction, the company debits Prepaid Insurance for $24,000 and credits Cash for $24,000. As of January 31, the company has consumed one month of insurance. What adjusting entry is necessary at January 31? A) B) C) D)
B)
Suppose that a business purchases a 6-month general liability insurance policy for $24,000 on January 1. To record this transaction, the company debits Prepaid Insurance for $24,000 and credits Cash for $24,000. As of January 31, the company has consumed one month of insurance. What adjusting entry is necessary at January 31? A) B) C) D)
C)
Suppose that a business purchases a 6-month general liability insurance policy for $24,000 on January 1. To record this transaction, the company debits Prepaid Insurance for $24,000 and credits Cash for $24,000. As of January 31, the company has consumed one month of insurance. What adjusting entry is necessary at January 31? A) B) C) D)
D)
Suppose that a business purchases a 6-month general liability insurance policy for $24,000 on January 1. To record this transaction, the company debits Prepaid Insurance for $24,000 and credits Cash for $24,000. As of January 31, the company has consumed one month of insurance. What adjusting entry is necessary at January 31? A) B) C) D)

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