Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 49 - No. 7)
Which of the following entries correctly reflects adjusting for prepaid insurance?
Debit Prepaid Insurance, Credit Cash.
Debit Prepaid Insurance, Credit Insurance Expense.
Debit Insurance Expense, Credit Prepaid Insurance.
Debit Insurance Expense, Credit Cash.
Explanation
This recognizes the expense and reduces the asset.
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