Multiple Choice
If a company pays a 12-month insurance premium for $2 400 on 1 May 2019, then at 30 June 2019 the accounts will show:
A) a prepayment of $2 000 in the balance sheet and an insurance expense of $400 in the profit and loss account.
B) a prepayment of $400 in the balance sheet and an insurance expense of $2 000 in the profit and loss account.
C) a $2 400 asset in the balance sheet.
D) a $2 400 expense in the profit and loss statement.
Correct Answer:
Verified
Correct Answer:
Verified
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