The answer is B. Prepaid Insurance.

Here's why:

In accounting, accounts are classified into two main types: temporary (nominal) accounts and permanent (real) accounts.

Temporary accounts are those that are closed at the end of each accounting period. These include all income statement accounts such as revenues, expenses, gains, and losses. So, options A, C, and D (Interest Revenue, Insurance Expense, and Supplies Expense) are all temporary accounts.

On the other hand, permanent accounts are those that are not closed at the end of the accounting period. These include all balance sheet accounts such as assets, liabilities, and equity accounts. Prepaid Insurance is a type of asset account, and therefore, it is considered a permanent or real account.

Question

The answer is B. Prepaid Insurance.

Here's why:

In accounting, accounts are classified into two main types: temporary (nominal) accounts and permanent (real) accounts.

Temporary accounts are those that are closed at the end of each accounting period. These include all income statement accounts such as revenues, expenses, gains, and losses. So, options A, C, and D (Interest Revenue, Insurance Expense, and Supplies Expense) are all temporary accounts.

On the other hand, permanent accounts are those that are not closed at the end of the accounting period. These include all balance sheet accounts such as assets, liabilities, and equity accounts. Prepaid Insurance is a type of asset account, and therefore, it is considered a permanent or real account.

Knowee AI · Accepted Answer

The answer is B. Prepaid Insurance.

Here's why:

In accounting, accounts are classified into two main types: temporary (nominal) accounts and permanent (real) accounts.

Temporary accounts are those that are closed at the end of each accounting period. These include all income statement accounts such as revenues, expenses, gains, and losses. So, options A, C, and D (Interest Revenue, Insurance Expense, and Supplies Expense) are all temporary accounts.

On the other hand, permanent accounts are those that are not closed at the end of the accounting period. These include all balance sheet accounts such as assets, liabilities, and equity accounts. Prepaid Insurance is a type of asset account, and therefore, it is considered a permanent or real account.

LO 5.1 Which of the following accounts is considered a permanent or real account?Choose one answer from the options below.A. Interest RevenueB. Prepaid InsuranceC. Insurance ExpenseD. Supplies Expense

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