Company A is sending a check to Company B(manufacturing company) each month as a prepay to cover expenses. On the books of Company B upon receiving the check from Company A, the check would be recorded as a debit to cash and a credit to what? What type of prepaid account should be set up? Once the items/material is shipped, the amount would then go into sales from the prepaid account. Is this correct?

Your question is unclear. Specifically, your facts are.

Company A is trying to pay for Company B's expenses why?

From the latter part though, it sounds like its Unearned Revenue.

So I would say debit Cash, Credit Unearned Revenue (as you seem to be saying that Company B ships out a product to Company A later on.. hence, a sale)