Prepaid insurance is reported on the balance sheet as a
A) current asset
B) fixed asset
C) current liability
D) long-term liability

Question

Quizplus · Accepted Answer

Prepaid insurance represents an advance payment made by the company for future insurance coverage. As the coverage period decreases, the amount of prepaid insurance decreases as well. Therefore, it is classified as a current asset on the balance sheet.

Prepaid Insurance Is Reported on the Balance Sheet as a