Neco 2022 Financial Accounting Question 17

Practice objective / multiple choice question 17 from the 2022 Neco Financial Accounting examination.

Neco 2022 Financial Accounting Objective / Multiple Choice Easy Difficulty

Question 17 NECO • 2022 • FINANCIAL_ACCOUNTING • objective

A company pays \(50,000\) for a 5‑month insurance policy starting on 1 July. At the end of July, how much insurance expense should be recognised and what is the balance in the prepaid insurance account?

A. Insurance expense = 5,000; Prepaid insurance = 45,000

B. Insurance expense = 12,500; Prepaid insurance = 37,500

Correct Answer C. Insurance expense = 10,000; Prepaid insurance = 40,000

D. Insurance expense = 20,000; Prepaid insurance = 30,000

Correct Answer

Correct Option:

Insurance expense = 10,000; Prepaid insurance = 40,000

This is Neco 2022 Financial Accounting Question 17. It is one of the objective questions from the 2022 Neco Financial Accounting examination.

Difficulty level: Easy .

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