Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

NACVA CVA Exam - Topic 3 Question 120 Discussion

Normally, the business will realize the economic benefit of the prepaid expenses within the normal course of one business cycle. Therefore, normally:
C) No revaluation adjustment is required with respect to recorded prepaid expenses
B) No revaluation adjustment is required
D) Revaluation adjustment is required with respect to recorded prepaid assets
A) Revaluation adjustment is required

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:

Show Suggested Answer Hide Answer
Suggested Answer: C

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

Limited Time Offer

25%

Off

Get Premium CVA Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Tasia
1 month ago
I thought they were liabilities?
upvoted 0 times
...
Jeff
1 month ago
It's all about timing, for sure.
upvoted 0 times
...
Pamela
1 month ago
Wait, are they really beneficial in the long run?
upvoted 0 times
...
Raina
2 months ago
Totally agree, they help with cash flow!
upvoted 0 times
...
Dominga
2 months ago
Prepaid expenses are assets until used.
upvoted 0 times
...
Juan
2 months ago
Wait, does that mean I can't just expense it all in the first year? Darn.
upvoted 0 times
...
Edelmira
2 months ago
Haha, the normal business cycle, not the abnormal one! Good one.
upvoted 0 times
...
Ivette
2 months ago
Prepaid expenses are typically recognized over the normal operating cycle, not just one year.
upvoted 0 times
...
Mendy
2 months ago
I think the correct answer is that the prepaid expenses should be recognized over the normal business cycle.
upvoted 0 times
...
Josue
3 months ago
The normal course of one business cycle is the key here.
upvoted 0 times
...
Mollie
3 months ago
I feel like I’ve seen similar questions before, and they usually emphasize the importance of recognizing expenses in the right period.
upvoted 0 times
...
Rhea
3 months 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.
upvoted 0 times
...
Dorethea
4 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.
upvoted 0 times
...
Letha
4 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.
upvoted 0 times
...
Barney
4 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.
upvoted 0 times
...
Shenika
4 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.
upvoted 0 times
...
Jolene
4 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.
upvoted 0 times
...
Clorinda
5 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.
upvoted 0 times
...
Mona
5 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.
upvoted 0 times
...

Save Cancel