You own a small business and you decide to purchase insurance for your business on March 31 that covers a 12-month period beginning the next day.The insurance company requires the annual premium amount upfront.On December 31, what portion of the premium should you expense in your financial statements?
A)100%
B)75%
C)67%
D)33%

Question

Quizplus · Accepted Answer

The insurance covers a 12-month period starting from April 1. By December 31, 9 months of the coverage period have passed, which is 75% of the annual coverage.

You Own a Small Business and You Decide to Purchase