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Cloud [144]
3 years ago
9

​Smokey's Sandwich Shoppe paid​ $3,000 for a 2minusyear insurance policy on March​ 1, 2018. The accountant forgot to make any ad

justments during the year. What effect would this have on the financial statements for​ 2018?
Business
1 answer:
disa [49]3 years ago
4 0

Answer:

insurance expense         1,250 debit

      prepaid insurance                        1,250 credit

Explanation:

the insurance contract is for 2 year so, 24 months

3,000 is the value of 24 month of insurance:

3,000 / 24 = 125 per month

From March 1st, 2018 to December 31th,2018  --> 10 months

125 x 10 = 1,250

This is the case of an accrued expense.

Our prepaid insurance will decrease by this amount and we will recognize the 1,250 insurance expense.

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Answer:

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4 0
3 years ago
The quantity theory of money is a theory of how A) the money supply is determined. B) interest rates are determined. C) the nomi
meriva

Answer:

C) the nominal value of aggregate income is determined

Explanation:

The quantity theory of money states that nominal aggregate income is determined by money supply. It is assumed that money velocity is constant in the short run and so would not impact nominal aggregate income.

The quantity theory of money is obtained from the equation of exchange which is:

(Money supply × velocity ) = (price × agregrate output)

Dividing both sides by velocity gives,

Money supply = (1/velocity) × ( price × agregrate output)

It is assumed velocity is constant, therefore,

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I hope my answer helps.

All the best

5 0
3 years ago
One advantage of having an ATM card is that it can be used to
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Answer:

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2 years ago
On January 2, 2018, Schneider Company issues $100,000 of 6% bonds. Interest of $3,000 is payable semi-annually on June 30 and De
4vir4ik [10]

Answer:

$3,354.

Explanation:

$95,842 * 0.035 = $3,354.

5 0
3 years ago
One advantage of the interview method of personality assessment is the ___________. ease of interpreting responses
dolphi86 [110]
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