Module 2 Test: Financial Statement Preparation
Module 2 • 10 Questions
Question 1 of 10
0 of 10 answered
An insurance premium of Rs. 12 lakhs is paid in October for cover running October to September, and the books close on 31 December. The original entry debited Insurance Expense with the full Rs. 12 lakhs. What is the 31 December adjustment?
A
Prepaid Insurance Dr. 3,00,000 To Insurance Expense 3,00,000
B
Insurance Expense Dr. 3,00,000 To Cash and Bank 3,00,000
C
Insurance Expense Dr. 9,00,000 To Prepaid Insurance 9,00,000
D
Prepaid Insurance Dr. 9,00,000 To Insurance Expense 9,00,000