If prepaid insurance decreases during an accounting period, then the cash paid for insurance is less than the period's insurance expense.

Name: If prepaid insurance decreases during an accounting period, then the cash paid for insurance is less than the period's insurance expense.
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If prepaid insurance decreases, it means that the insurance expense recognized is greater than the cash paid, as some of the expense is covered by the prepaid amount.

If Prepaid Insurance Decreases During an Accounting Period, Then the Cash