A County Uses the Consumption Method in Accounting for Insurance

Multiple Choice

A county uses the consumption method in accounting for insurance premium prepayments. At the beginning of the fiscal year, the county paid a $24,000 insurance premium to cover the current year and the subsequent fiscal year. At the end of the current year, the county will report in its General Fund

A) Expenditures of $24,000.
B) Expenditures of $12,000 and a $12,000 prepaid asset.
C) A $24,000 prepaid asset.
D) Other financing use of $24,000.