Which of the following is most likely to result in an adjusting entry at the end of the period?
A) Payment of two months' insurance in advance
B) Payment of one month's rent
C) Owner's withdrawals
D) Payment for routine maintenance on the company van

Question

Quizplus · Accepted Answer

Payment of two months' insurance in advance would result in an adjusting entry because only one month's worth should be expensed in the current period and the other month's worth should be recorded as a prepaid expense to be used in the following period. The other options do not typically require adjusting entries at the end of the period.

Which of the Following Is Most Likely to Result in an Adjusting