The 4,500 balance in Prepaid Insurance represents the premium ...

[mrsjacobs44]

The 4,500 balance in Prepaid Insurance represents the premium paid in advance for a three-month liability insurance policy. Assuming that 2 months of premium has now expired, the adjustment would be recorded in the work sheet as a:
 a. debit to Prepaid Insurance, 4,500
  b. credit to Prepaid Insurance, 1,500
  c. debit to Insurance Expense, 4,500
  d. debit to Insurance Expense, 3,000

Question 2

Why it is important to distinguish between enterprise goodwill and personal goodwill in divorce valuations?
 
  A) In many states, enterprise goodwill is not considered a marital asset while personal goodwill is.
  B) In many states, enterprise goodwill is considered a marital asset while personal goodwill is not.
  C) Enterprise goodwill can be valued reasonably, while it is not possible to value personal goodwill.
  D) Enterprise goodwill cannot be separately identified, while personal goodwill can be identified.

[Bsand8]

Answer to Question 1

D

Answer to Question 2

B
Explanation: B) In divorce valuations, it may be necessary to distinguish between enterprise goodwill, which is tied to the business entity, and personal goodwill, which is tied to a particular individual. This distinction is important because, in many states, enterprise goodwill is considered a marital asset while personal goodwill is not.