Multiple choice

A prepayment of Insurance premium will appear in the Balance Sheet as :

  1. A Liability

  2. An Current Asset

  3. Goodwill

  4. Sales

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Prepaid expenses (e.g. prepaid insurance premiums) are usually used within a year after the balance sheet date and thus, are considered a current asset.

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