Which of the Following Describes the Amount of Insurance Expense

question 129

Multiple Choice

Which of the following describes the amount of insurance expense reported on the income statement?

• A)The amount of cash paid for insurance in the current period.
• B)The amount of cash paid for insurance in the current period less any unpaid insurance at the end of the period.
• C)The amount of insurance used up (incurred)in the current period to help generate revenue.
• D)The amount of cash paid for insurance that is reported within the statement of cash flows.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of those materials.

Standard Costs

Predetermined costs for materials, labor, and overhead used as benchmarks against actual production costs.

Gallons

A unit of volume measurement used primarily in the United States, equivalent to 3.785 liters.

Raw Materials Inventory

The total cost of all the raw materials that are currently held by a company in stock, awaiting to be used in production.