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:

Depreciation Recapture

A tax provision where depreciation taken on an asset is taxed as ordinary income when the asset is sold.

Adjusted Basis

The original cost of an asset, adjusted for factors like improvements or depreciation, used to calculate capital gains or losses for tax purposes.

Recognized Gain

The income gained through the disposal of an asset, which is required to be declared for taxation reasons.

Adjusted Basis

The value of an asset for tax purposes, adjusted for improvements, depreciation, and deductions, used to calculate gains or losses on sale or disposal.