3. What accounting principle suggests that it is unnecessary to divide the monthly utility bill (for gas and electricity) between the two calendar months to which it applies?

7. An insurance carrier specializes in 12-month fire insurance policies. All of its clients pay premium in advance, in cash, for these policies. How should the insurance company record these cash payments when received? What adjusting entries should be made at the end of each month?

9. This month Clark & Sons purchased, by mistake, enough pencils to last five years at a total cost of $73. What adjusting entries, if any, should Clarks accountant make at the end of this accounting period?

11. Explain why the failure to pay by customer who bought $400 of merchandise on credit four months ago does not affect profits in the current month, if the company uses the contra account Allowance for Doubtful Accounts