Accounting chapter 2 homework

Question:

Where does pre-paid insurance go on the balance sheet?

Answer:

When insurance is a short-term asset, how does it work? Most insurance premiums are paid for only one year at a time, so prepaid insurance is usually a short-term or current asset. The majority of insurance premiums are paid once or twice a year. Most of the time, prepaid insurance is a current asset because it can be turned into cash or used right away. But if a prepaid expense isn’t used up within a year of being paid for, it becomes a long-term asset, which doesn’t happen very often. Most of the time, prepaid insurance is an asset account with a negative balance. The debit balance shows the amount that is still prepaid as of the date of the balance sheet.

Get Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework

Professional And Experienced Writers - 24/7 Online Support

Top Grade Tutor

ONLINE

Top Grade Writer

10374 Orders Completed

Top Academic Guru

ONLINE

Top Academic Guru

9345 Orders Completed

Top Essay Writer

ONLINE

Top Essay Writer

8379 Orders Completed

Get Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework