If the Ratio of Insurance Expense to Related Property, Plant

Multiple Choice

If the ratio of insurance expense to related property, plant, and equipment is higher than expected, which of the following is a plausible explanation?

A) Too much expired insurance is still included in prepaid insurance.
B) PP&E insurance expense includes some expenses related to product liability insurance.
C) Depreciation expense was based on overly short useful lives.
D) Some routine maintenance on equipment was added to the equipment asset account.