On 1 April 2019, Waratah Ltd paid for a yearly insurance for $48,000. How much of insurance expense should be recognised in the income statement on 31 December 2019?
A) $24,000.
B) $36,000.
C) $40,000.
D) $48,000.

Question

Quizplus · Accepted Answer

By applying expense recognition criteria, 9 month of insurance should be recognised as expense in 2019 and the remainder in 2017 (9/12 x $48,000 = $36,000).

On 1 April 2019, Waratah Ltd Paid for a Yearly