Cima C02 Exam Question No 29

Question No 29:

On the first day of Month 1, a business had prepaid insurance of $10,000. On the first day of Month 8, it paid, in full, the annual insurance invoice of $36,000, to cover the following year.
What is the amount charged in the income statement and the prepayment shown in the statement of financial position at the year end?

                   IS $                   SFP$

A.             5,000                   24,000
B.             22,000                 23,000
C.             25,000                 21,000
D.             36,000                 15,000

Answer: D