BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Prepaid Insurance is a current asset as the benefit from the same is yet to be availed.

Detailed explanation-2: -Prepaid insurance is usually considered a current asset, as it becomes converted to cash or used within a fairly short time.

Detailed explanation-3: -All insurance policies become an asset once the plan matures-that is, you have paid for it and are credited with a lump sum.

Detailed explanation-4: -Assets include physical items such as machinery, property, raw materials and inventory, and intangible items like patents, royalties and other intellectual property.

Detailed explanation-5: -Example of a Prepaid Asset A business pays $12, 000 in advance for one year of property insurance. The payment is initially recorded as a prepaid asset. In each subsequent month, $1, 000 of the insurance asset is charged to expense, which reflects the consumption of the asset over time.