39. Which of the following statements about the accrual basis of accounting is false: A. B. C. UD D. An expense is recognised in the period when the benefit deriving from the associated expenditure arises. The wages accrued account records the cost of work performed but not paid for at the end of the accounting period. Revenue is recognised when it is earned and certain. The accrual basis of accounting lies behind the concept of depreciating an asset as it is used. Chris Quilding 40. E. An expense is recognised in the period that it is paid for. The Sydney Jazz Festival company made an annual insurance premium payment of $1,200 on 1st March 2011. It recorded this payment by debiting its insurance prepaid account $1,200 and crediting its cash account $1,200. The insurance adjusting entry that will need to be made at its financial year end of 31 December 2011 is: A. Debit Insurance Expense $200; Credit Insurance Prepaid $200 Debit Insurance Prepaid $1,000; Credit Insurance Expense $200 Debit Insurance Expense $1,000; Credit Insurance Prepaid $1,000 Debit Insurance Prepaid $200; Credit Insurance Prepaid $200 None of the above AECDE B. C. D. E.