Which of the following describes the amount of insurance expense reported on the income statement?

Question

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The insurance expense reported on the income statement represents the amount of insurance used up (incurred) in the current period to help generate revenue. This is an expense recognition principle in accounting, which requires that expenses be recognized when they are incurred, not when they are paid. The amount of cash paid for insurance may differ from the insurance expense reported on the income statement due to changes in prepaid insurance or insurance payable accounts.

Which of the Following Describes the Amount of Insurance Expense