Question

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets

B. Long-term investments

C. Plant assets

D. Intangible assets

E. Current liabilities

F. Long-term liabilities

G. Equity

9. Prepaid insurance

Short answer

The correct answer isA. Current assets

Step-by-step solution

Definition of Insurance

Insurance is the security purchased for assets and individuals to minimize the risk of loss in monetary terms.

Reason of choice

Prepaid insurance is the amount paid for the premium of the insurance that becomes due in the future but before the completion of the accounting year, so it should be disclosed as the current asset until it becomes due and expensed.