On January 1, 2020, Power Company purchased a one-year insurance policy for $2,400. When the company closes its books and prepares financial statements at the end of January, what entry should be made regarding this item on January 31, 2020? OA Balance sheet Incme statement Cash flow statement Liabilities SE Expenses +2,400 OR OC OD Assets +2,400 Assets -2.400 -200 -200 Assets +2,400 Balance sheet Assets Liabilities SE -200 Balance sheet Liabilities SE -2600 Revenue -200 Expenses NI Income statement Revenue Expenses NI Income statement +200 -200 -200 Balance sheet Income statement Liabilities SE Revenue Expenses NI Cash flow statement Revenue Expenses NI Revenue Expenses NI +200 Revenue -200 Cash flow statement Expenses NI +2,600 -2,600 Revenue +200 NI -2,400 Cash flow statement Revenue Expenses -200 NI
On January 1, 2020, Power Company purchased a one-year insurance policy for $2,400. When the company closes its books and prepares financial statements at the end of January, what entry should be made regarding this item on January 31, 2020? OA Balance sheet Incme statement Cash flow statement Liabilities SE Expenses +2,400 OR OC OD Assets +2,400 Assets -2.400 -200 -200 Assets +2,400 Balance sheet Assets Liabilities SE -200 Balance sheet Liabilities SE -2600 Revenue -200 Expenses NI Income statement Revenue Expenses NI Income statement +200 -200 -200 Balance sheet Income statement Liabilities SE Revenue Expenses NI Cash flow statement Revenue Expenses NI Revenue Expenses NI +200 Revenue -200 Cash flow statement Expenses NI +2,600 -2,600 Revenue +200 NI -2,400 Cash flow statement Revenue Expenses -200 NI
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
E.7.
Transcribed Image Text:QUERIMIE
On January 1, 2020, Power Company purchased a one-year insurance policy for $2,400. When the company closes its books and prepares financial statements at the end of
January, what entry should be made regarding this item on January 31, 2020?
OA
Balance sheet
Income statement
Liabilities
Expenses
+2,400
OB
OC
OD
Assets
+2,400
Balance sheet
Assets Liabilities SE
-2.400
-2600
-200
SE
-200
-200
Balance sheet
Assets Liabilities SE
-200
Revenue
Balance sheet
Assets Liabilities SE Revenue Expenses NI
-200
Income statement
Revenue Expenses NI
Income statement
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NI
+200
Income statement
Revenue Expenses NI
+200
-200
-200
Cash flow statement
Expenses
+2,400
Revenue
Cash flow statement
Revenue
Cash flow statement
Revenue
Expenses
NI
+2,600 -2,600
Expenses
+200
NI
-2,400
Cash flow statement
NI
-200
Revenue Expenses NI
Question 11 c
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