Is Prepaid Insurance An Asset. Nov 30, 2011, 06:59 am. Because you use the prepaid sum or expires within a year of the balance sheet date, prepaid.
Prepaid insurance is treated in the accounting records as an asset, which is gradually charged to expense over the period covered by the related insurance contract. Once incurred, the asset account is reduced, and the expense is recorded on the. Prepaid insurance is among the most common prepaid assets.
Prepaid Insurance (Definition, Journal Entries) Is it an Asset?
Insurance expense is when the insurance has been used up, thus making it an actual expense on the income statement. Yes, prepaid insurance is an asset. Anything that is owned by a company and has a future value that can be measured in money is considered an asset. The payment of the insurance expense is similar.
