For the financial year 2017-18, which of the following is adjusted and considered as a prepaid expense?

Insurance premium paid for the period of 6 months commencing from 1st May 2017

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Insurance premium paid for the period of 12 months commencing from 1st May 2017

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Insurance premium paid for the period of 10 months commencing from 1st May 2017

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None of the above

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Solution

The correct option is B
Insurance premium paid for the period of 12 months commencing from 1st May 2017

The insurance premium paid is from May'17 to May'18. So the premium pertaining to May'18 will be considered as a prepaid expense in FY 2017-18

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Similar questions

Which of the following adjusting entry is correct for prepaid expenses?

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