Prepaid insurance is shown on the financial statement as?

It consider Current assets

The appropriate answer from the options is current asset. I usually don't agree classifying prepayed insurance as current asset. Because current assets are assets that can be changed or realised into cash in the coming12 months from the date of the balance sheet date. Therefore can insurance payed in advance be changed or realised into cash like account receivable or inventory within12 months? If the answer is yes it can be but in usual circumstances it can't be realised. For this reason I prefer to take it into other asset. It affects financial statement analysis like working capital analysis. Regards

Prepaid insurance is a Current Asset

A- Current assets ( Balance sheet accounts ) 

 

it will be an asset because you paid an expense before it accrued.

OPTION A> CURRENT ASSETS............

B-                          

Current assets

Prepaid Insurance is basically an insurance that a company paid in advance to an insurance company which is related to next period. So, the proper entry for the Prepaid insurance on the payment is:

Dr. Prepaid Insurance (Increase C. Asset)

Cr.    To Cash (Decrease C. Asset) 

 

And at the end of accounting period make an adjusting entry for a related expense. that is :

Dr. Insurance Expense (Charged to P/L)

Cr. Prepaid Insurance (Decrease C. Asset)

 

So in this Question, A is the Correct Ans.

current asset because u get benifit from  this in future

Prepaid insurance is shown on the financial statement as "Current Assets"

A- Current Asset. As the expenditure will be adjusted in future