Insurance prepaid is shown as:___________?
Correct answer: B. Current Asset
- A. Current Liability
- B. Current Asset
- C. Fixed Asset
- D. Income
Explanation
Prepaid insurance represents a benefit that will be received in a future period, so it is recorded as a current asset until it expires or is consumed.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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