Making a prepayment for insurance will have the effect of select one: a) Increasing expenses and decreasing net profit b) decreasing expenses and increasing gross profit c) Increasing expenses and decreasing gross profit d) Decreasing expenses and increasing net profit

Making a prepayment for insurance will have the effect of select one: a) Increasing expenses and decreasing net profit b) decreasing expenses and increasing gross profit c) Increasing expenses and decreasing gross profit d) Decreasing expenses and increasing net profit

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 6PA: What two accounts are affected by each of these adjustments? A. billed customers for services...

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Concept explainers

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.

Question

Making a prepayment for insurance will have the effect of select one:

a) Increasing expenses and decreasing net profit

b) decreasing expenses and increasing gross profit

c) Increasing expenses and decreasing gross profit

d) Decreasing expenses and increasing net profit

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