Insurance paid in advance is shown as a current asset in balance sheet .?

Question

options

A) business entity

B)duality

C) matching

D)realisation

Answer 1

a.

Answer 2

I think the right answer is C.  Two reasons:

1)  When you pay insurance in advance, you're accounting for an expense in the future.  So, it's not yet an expense, but an asset (it's rare to pay for insurance more than a year in advance, so it'd be a current asset).  The matching principle in accounting attempts to assign revenues and expenses to the period in which they're earned/incurred.

2) I don't understand how any of the other three ideas relate to the statement above.  Perhaps some more context would help to clarify.

Hope that helps!