QAEconomics › Making insurance payments in advance is an example of:
Q

Making insurance payments in advance is an example of:

a) An accrued revenue.

b) An accrued expense.

c) An unearned revenue.

d) A prepaid expense.

A

Answer: d) A prepaid expense.

Making insurance payments in advance is an example of a prepaid expense. Payment for an asset that has yet to be gotten is called a prepaid expense. An accrued revenue is the type of income that has been gotten or obtained, although no cash payment has been made. Accrued liabilities are expenses that have been incurred, although the expenditures have not been documented. Unearned revenue is payment for products or services yet to be received.

3 years ago
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