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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