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anygoal [31]
3 years ago
10

A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments c

olumns 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.
Business
1 answer:
Nesterboy [21]3 years ago
6 0

Answer:

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.

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Gwar [14]

Answer:

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Explanation:

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8_murik_8 [283]

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<h3>What is  Business cycles?</h3>

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Sveta_85 [38]

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<h3 /><h3>What is a hypothesis?</h3>

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horrorfan [7]

The Adams Manufacturing has allocated its total overhead costs by a sum of $17,200, which is over-applied.

<h3>What are overhead costs?</h3>

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