Making insurance payments in advance is an example of a(n):
A)Accrued revenue.
B)Accrued expense.
C)Deferred revenue.
D)Prepaid expense.

Question

Quizplus · Accepted Answer

Making insurance payments in advance is considered a prepaid expense because the company has paid for the insurance coverage before it was received or used. The expense is then gradually recognized over the term of the insurance coverage.

Making Insurance Payments in Advance Is an Example of A(n)