Asked by
Caoile, Yazmine Aliyah A.
on Oct 28, 2024
Verified
The Logan Company does not carry fire insurance for any of its factories.Instead, the company appropriates retained earnings each year for an amount equal to the estimated annual insurance premiums.During the current year, one of its factories is destroyed by fire.Logan should debit which one of the following accounts to record the destruction
A) Loss Due to Fire
B) Retained Earnings Appropriated for Fire Loss
C) Retained Earnings (Unappropriated)
D) Liability for Fire Loss
Retained Earnings Appropriated
Portions of retained earnings that are set aside or reserved by a company's management for specific purposes.
Fire Loss
Financial damage or asset destruction resulting from a fire, often requiring assessment for insurance and recovery purposes.
- Understand and apply accounting principles to prior period adjustments and their impact on financial statements.
Verified Answer
JL
Learning Objectives
- Understand and apply accounting principles to prior period adjustments and their impact on financial statements.
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