Which of the following describes the amount of insurance expense reported on the income statement?
Posted: Sat Aug 07, 2021 6:51 am
A) The amount of cash paid for insurance in the current period.
B) The amount of cash paid for insurance in the current period less any unpaid insurance at the
end of the period.
C) The amount of insurance used up (incurred) in the current period to help generate revenue.
D) The amount of cash paid for insurance that is reported within the statement of cash flows.
Answer: C
Explanation: The income statement reports expenses, as they are incurred, to generate revenue
for the accounting period.
B) The amount of cash paid for insurance in the current period less any unpaid insurance at the
end of the period.
C) The amount of insurance used up (incurred) in the current period to help generate revenue.
D) The amount of cash paid for insurance that is reported within the statement of cash flows.
Answer: C
Explanation: The income statement reports expenses, as they are incurred, to generate revenue
for the accounting period.