What Is Prepaid Insurance?

The portion of an insurance premium, paid in advance and has not expired as of the date of a company’s balance sheet, is termed prepaid insurance.

As the prepaid insurance amount expires, it is moved from the current asset account prepaid insurance to the income statement account insurance expense. This process is usually performed towards the end of every accounting period through an adjusting entry.

Explore more such questions and answers at BYJU’S.

Was this answer helpful?

 
   

0 (0)

(0)
(0)

Choose An Option That Best Describes Your Problem

Thank you. Your Feedback will Help us Serve you better.

Leave a Comment

Your Mobile number and Email id will not be published. Required fields are marked *

*

*

BOOK

Free Class

Ask
Question