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NACVA CVA Exam - Topic 3 Question 120 Discussion

Actual exam question for NACVA's CVA exam
Question #: 120
Topic #: 3
[All CVA Questions]

Normally, the business will realize the economic benefit of the prepaid expenses within the normal course of one business cycle. Therefore, normally:

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Suggested Answer: C

by Latonia at Jan 26, 2026, 10:28 PM

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Raina
2 days ago
Totally agree, they help with cash flow!
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Dominga
7 days ago
Prepaid expenses are assets until used.
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Juan
12 days ago
Wait, does that mean I can't just expense it all in the first year? Darn.
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Edelmira
17 days ago
Haha, the normal business cycle, not the abnormal one! Good one.
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Ivette
22 days ago
Prepaid expenses are typically recognized over the normal operating cycle, not just one year.
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Mendy
28 days ago
I think the correct answer is that the prepaid expenses should be recognized over the normal business cycle.
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Josue
1 month ago
The normal course of one business cycle is the key here.
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Mollie
1 month ago
I feel like I’ve seen similar questions before, and they usually emphasize the importance of recognizing expenses in the right period.
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Rhea
1 month ago
If I recall correctly, prepaid expenses should be amortized over the period they benefit, but I’m a bit confused about the exact journal entries.
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Dorethea
2 months ago
I remember a practice question where we had to adjust prepaid expenses at the end of the period. It was tricky figuring out the timing.
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Letha
2 months ago
I think prepaid expenses are considered assets until they are used up, but I'm not entirely sure how they affect the income statement.
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Barney
3 months ago
This looks straightforward enough. I'd focus on explaining the normal treatment of prepaid expenses and how that relates to the business cycle mentioned in the question. Shouldn't be too tricky if I can recall the relevant principles.
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Shenika
3 months ago
I'm a little confused by the wording here. I'd probably start by defining the key terms and then try to reason through the implications. Might need to draw on some concepts from my accounting classes.
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Jolene
3 months ago
Okay, I've got this. The key is understanding that prepaid expenses are typically realized within one business cycle. So I'd explain that and then apply that principle to the given scenario.
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Clorinda
3 months ago
Hmm, this seems like a tricky one. I'm not totally sure what the question is asking for. I might need to re-read it a few times and think through some examples to really understand what's going on.
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Mona
3 months ago
I think I know how to approach this. I'd start by identifying the key terms and concepts, like "prepaid expenses" and "business cycle". Then I'd try to apply the general principles to the specific situation described.
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