The Type of Account and Normal Balance of Prepaid Insurance

question 105

Multiple Choice

The type of account and normal balance of Prepaid Insurance would be

• A) asset, credit
• B) asset, debit
• C) contra asset, credit
• D) contra asset, debit

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Definitions:

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive in the market.

Economic Rent

Income derived from the possession of a unique resource, exceeding that which is needed to keep the resource in its current employment.

Economic Profit

The profit from producing goods and services while considering both explicit and implicit costs, including opportunity costs.

Producer Surplus

The gap between the price that sellers are prepared to accept for a product and the real price it sells for in the market.