Instre Accounting Equation Accounting Journal Accounting Ledger Accounting Equation f. -On August 1, 2010, the company purchased a six-month insurance policy for $3,600 cash (debited to Prepaid Insurance at that time). An adjustment is needed for the year ended December 31, 2010. Assets Liabilities Equity Prepaid Insurance -3,000 Insurance Expense -3,000 %3D Show me how to do this step: Some of the 6-month insurance policy was used up during this accounting period, so we must adjust accordingly. Ask a Question Analyzing the Event O What is the purpose.of adjusting entries? How did this affect the company's assets? Did this cause liabilities or equity to change? O How did you get $3,000 as the amount to adjust? How do you check if this transaction kept the accounting equation in balance? Is this an adjustment for an accrued expense or a deferred expense? Potential Misconceptions Does recording an expense always mean assets are reduced?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Okay it showed me the answer after getting it incorrectly but didn’t tell me the calculations to do it correctly for future/ other problems. Can someone teach me please ?
QUANTUM
iatruct
Accounting Equation
I Accounting Journal
OAccounting Ledger
Accounting Equation
f. - On August 1, 2010, the company purchased a six-month insurance policy for
$3,600 cash (debited to Prepaid Insurance at that time). An adjustment is needed
for the year ended December 31, 2010.
Assets
Liabilities
Equity
%3D
Prepaid Insurance
-3,000
Insurance Expense
-3,000
%3D
Show me how to do this step:
Some of the 6-month insurance policy was used up during this accounting period, so
we must adjust accordingly.
Ask a Question
Analyzing the Event
O What is the purpose.of adjusting entries?
O How did this affect the company's assets?
O Did this cause liabilities or equity to change?
How did you get $3,000 as the amount to adjust?
How do you check if this transaction kept the accounting equation in balance?
O Is this an adjustment for an accrued expense or a deferred expense?
Potential Misconceptions
O Does recording an expense always mean assets are reduced?
Copyright Quantum Adaplive Learning, LLC AlI rights reserved.
Quantum Intelligent Tuloring Engines, Quantum Tutors, Quantum Assessment Advisors and Quantum Men
contain palented and patont-pending technologios and are registered trademarks @ of Quantum Adaptive Leami
Acknowledgments
Transcribed Image Text:QUANTUM iatruct Accounting Equation I Accounting Journal OAccounting Ledger Accounting Equation f. - On August 1, 2010, the company purchased a six-month insurance policy for $3,600 cash (debited to Prepaid Insurance at that time). An adjustment is needed for the year ended December 31, 2010. Assets Liabilities Equity %3D Prepaid Insurance -3,000 Insurance Expense -3,000 %3D Show me how to do this step: Some of the 6-month insurance policy was used up during this accounting period, so we must adjust accordingly. Ask a Question Analyzing the Event O What is the purpose.of adjusting entries? O How did this affect the company's assets? O Did this cause liabilities or equity to change? How did you get $3,000 as the amount to adjust? How do you check if this transaction kept the accounting equation in balance? O Is this an adjustment for an accrued expense or a deferred expense? Potential Misconceptions O Does recording an expense always mean assets are reduced? Copyright Quantum Adaplive Learning, LLC AlI rights reserved. Quantum Intelligent Tuloring Engines, Quantum Tutors, Quantum Assessment Advisors and Quantum Men contain palented and patont-pending technologios and are registered trademarks @ of Quantum Adaptive Leami Acknowledgments
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