As the Prepaid Workers' Compensation is recognized, the amount will transfer to:
A) Workers' Compensation Insurance Payable.
B) Workers' Compensation Insurance Expense.
C) Wages and Salaries Expense.
D) Payroll Tax Expense.

Question

Quizplus · Accepted Answer

Prepaid Workers' Compensation is an asset account that represents payments made in advance for insurance coverage. As the insurance coverage period elapses, the prepaid amount is recognized as an expense. Therefore, it transfers to Workers' Compensation Insurance Expense, reflecting the cost of insurance protection during the period it relates to.

As the Prepaid Workers' Compensation Is Recognized, the Amount Will