Question 1

ABC Inc. paid $12,000 on June 1 X1 for 6-month insurance on its warehouse (insurance coverage starting on July 1 X1). The entire amount in question was recorded by the accountant in the account

Insurance charges. .

Based on this information, what is the problem that the accountant will have to correct in order to present the financial statements for the period ended December 31 X1.

(The insurance charges paid in advance on December 31 X1 are under-

Evaluated.

X1's insurance costs are undervalued.

O Insurance charges paid in advance on December 31 X1 are overvalued.

X1's insurance costs are overvalued.

None of these answers