Eddy's statement of profit or loss for his first year of trading to 30 September 2019 showed a charge for insurance of £9,000. Eddy actually paid £13,000 for insurance during that financial year. Which of the following statements is true? a. Insurance had been prepaid by £4,000 at the year end. b. Insurance of £4,000 had been accrued for at the year end. c. Insurance of £9,000 had been accrued for at the year end. d. Insurance of £9,000 had been prepaid at the year end

Eddy's statement of profit or loss for his first year of trading to 30 September 2019 showed a charge for insurance of £9,000. Eddy actually paid £13,000 for insurance during that financial year. Which of the following statements is true? a. Insurance had been prepaid by £4,000 at the year end. b. Insurance of £4,000 had been accrued for at the year end. c. Insurance of £9,000 had been accrued for at the year end. d. Insurance of £9,000 had been prepaid at the year end

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 7DQ

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On January 1, 2019, Adams Company had a balance in prepaid insurance of $8,000. On December 31, 2019 Adams Company had a balance in prepaid insurance of $12,000. Adams’ 2019 income statement reported insurance expense of $17,000. How much cash did Adams pay for insurance during 2019?
During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2021, you discover the following:a. An insurance policy covering three years was purchased on January 1, 2021, for $6,000. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item.b. During 2021, the company received a $1,000 cash advance from a customer for merchandise to be manufactured and shipped in 2022. The $1,000 was credited to sales revenue. No entry was recorded for the cost of merchandise.c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $750 were on hand at December 31.d. Hales borrowed $20,000 from a local bank on October 1, 2021. Principal and interest at 12% will be paid on September 30, 2022. No accrual was recorded for interest.e. Net income reported in the 2021 income statement is $30,000 before reflecting any of the above…
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bartleby, a Learneo, Inc. business

	a.	Insurance had been prepaid by £4,000 at the year end.
	b.	Insurance of £4,000 had been accrued for at the year end.
	c.	Insurance of £9,000 had been accrued for at the year end.
	d.	Insurance of £9,000 had been prepaid at the year end.