Shortly after the end of an accounting period, a business receives an invoice for annual insurance to 31 August 2017 for 9,000

Accounting Nov 08, 2021

Shortly after the end of an accounting period, a business receives an invoice for annual insurance to 31 August 2017 for 9,000. If the accounting period ended of 30 November 2016, what is the required accrual or prepayment?

Expert Solution

The correct answer

Insurance expense to be accrued for 3 months (september to november 2016)

= total annual expense *3/12

= 9000*3/12

= $ 2250

So the insurance expense to be accrued $ 2250

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