An asset created by prepayment of an insurance expense is:
A)Recorded as a debit to Unearned Revenue.
B)Recorded as a debit to Prepaid Insurance.
C)Recorded as a credit to Unearned Revenue.
D)Recorded as a credit to Prepaid Insurance.
E)Not recorded in the accounting records until the insurance period expires.

Question

Quizplus · Accepted Answer

When prepaying for insurance expenses, the amount is recorded as a debit to Prepaid Insurance, indicating that it is a prepaid expense and will be used up over time.

An Asset Created by Prepayment of an Insurance Expense Is