Statement 1: Acquisition of premiums increases the total asset account of the entity. Statement 2: Premiums are classified as current asset instead of a current liability. Only the first statement is correct. Neither of the statement is correct. Only the second statement is correct. Both statements are correct.

Statement 1: Acquisition of premiums increases the total asset account of the entity. Statement 2: Premiums are classified as current asset instead of a current liability. Only the first statement is correct. Neither of the statement is correct. Only the second statement is correct. Both statements are correct.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter2: Analyzing Transactions: The Accounting Equation

Section: Chapter Questions

Problem 5TF: When an asset increases, a liability must also increase.

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