Answered: Proper adjusting entry based on prepaid…

Proper adjusting entry based on prepaid insurance account balance before adjustment $18650 and unexpired amounts per analysis of policies of $5990

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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Question

Proper adjusting entry based on prepaid insurance account balance before adjustment $18650 and unexpired amounts per analysis of policies of $5990

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

Expert Solution

Step 1: Define adjusting entry:

Adjusting entries are those which are reported at the end of the period in order to adjust the prepayments and accruals in the books of accounts.

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Subject:
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