Year-End Adjusting Entries in Bookkeeping

Steps:

• Identify standard double-entry for each adjustment to prepare accounts for P&L transfer.
• For 1: Prepaid insurance reduces expense; debit asset (prepaid insurance), credit insurance expense account. Debiting expense is incorrect.
• For 2: Reducing irrecoverable debts provision decreases contra-asset; debit allowance account, credit income or P&L. Correct.
• For 3: Annual depreciation increases contra-asset; debit depreciation expense, credit provision for depreciation account. Debiting provision is incorrect.
• Adjustment 4 not provided, making options B, D, and full evaluation ambiguous.

Why C is correct:

• Not enough information (missing adjustment 4 and confirmation on 3's terminology), but C avoids incorrect 1 while including plausible 2.

Why the others are wrong:

• A includes incorrect 1.
• B includes incorrect 1 and undefined 4.
• D includes undefined 4.

Final answer: Not enough information.