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    Emma44's Avatar
    Emma44 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Sep 16, 2016, 02:09 PM
    Probably Easy Accounting Question
    Which of the following entries records the payment of insurance for the current month?
    A) Prepaid Insurance, debit; Cash, credit
    B) Insurance Expense, debit; Accounts Receivable, credit
    C) Cash, debit; Insurance Expense, credit
    D) Insurance Expense, debit; Cash, credit
    smoothy's Avatar
    smoothy Posts: 25,490, Reputation: 2853
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    #2

    Sep 16, 2016, 02:10 PM
    If its easy... show us your answers like the homework rules require.

    If you are guessing, tell us why you think it's that... you won't pass the class if you don't understand the material.
    Emma44's Avatar
    Emma44 Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Sep 16, 2016, 02:16 PM
    Quote Originally Posted by smoothy View Post
    If its easy... show us your answers like the homework rules require.

    If you are guessing, tell us why you think it's that... you won't pass the class if you don't understand the material.
    I know the answer is either A or D because the Prepaid insurance or insurance expense would be debited and cash would be credited. However, I do not understand the difference between the two. It could be prepaid because it is for a month period or it could be just an insurance expense because the insurance is only for a month and not a longer period.
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