Question 13 of 22
Q.A pre-payment of insurance premium will appear in :
(a) The balance sheet, on the assets side
(b) The trading account, on the debit side
(c) The balance sheet, on the liabilities side
(d) The profit and loss account, on the credit side
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2023MCQ· 1mImportance★★★★★
59% · 13/22 Questions
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Start your 14-day free trial to unlock the full solution →Prepaid insurance premium is shown on the assets side of the balance sheet, so the answer is (a).
A pre-payment (prepaid expense) is the part of an expense paid during the current year whose benefit relates to the next year. Since the business has paid money but is still owed the service, it represents a current asset.
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