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Prepaid Insurance of P 60,000 was overlooked at the end of 2021. What would be the adjusting entry if the error was discovered at December 31, 2022? Debit - Retained Earnings, P 60,000; Credit - Insurance Expense, P 60,000. Debit - Prepaid Insurance, P 60,000; Credit - Retained Earnings, P 60,000. Debit - Insurance Expense, P 60,000; Credit - Retained Earnings, P 60,000. No adjusting entry is necessary

Prepaid Insurance of P 60,000 was overlooked at the end of 2021. What would be the adjusting entry if the error was discovered at December 31, 2022? Debit - Retained Earnings, P 60,000; Credit - Insurance Expense, P 60,000. Debit - Prepaid Insurance, P 60,000; Credit - Retained Earnings, P 60,000. Debit - Insurance Expense, P 60,000; Credit - Retained Earnings, P 60,000. No adjusting entry is necessary

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepaid Insurance of P 60,000 was overlooked at the end of 2021. What would be the adjusting entry if the error was discovered at December 31, 2022?

Debit - Retained Earnings, P 60,000; Credit - Insurance Expense, P 60,000.
Debit - Prepaid Insurance, P 60,000; Credit - Retained Earnings, P 60,000.
Debit - Insurance Expense, P 60,000; Credit - Retained Earnings, P 60,000.
No adjusting entry is necessary
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