Final answer:
Among the options given, prepaid insurance is a permanent or real account because its balance is carried forward into the following fiscal year. Interest Revenue, Insurance Expenses, and Supplies Expenses are all temporary accounts cleared annually.
Step-by-step explanation:
The account that is considered a permanent or real account among the options provided is B. Prepaid Insurance. Permanent accounts are those that carry their balance into the next fiscal year. They are not closed at the end of the accounting period, as is the case with temporary or nominal accounts (such as revenue and expense accounts). Instead, permanent account balances are carried forward and represent the actual worth of the company's assets, liabilities, and equity at any given time.
In contrast, Interest Revenue, Insurance Expenses, and Supplies Expenses are all considered temporary accounts, as they track financial activity for a specific accounting period and are reset by transferring their balances out to permanent accounts at the end of the period, usually through the income summary account. These accounts would start the new fiscal year with a zero balance.