Insurance expense for a fiscal year
Asked Jan 27, 2010, 09:39 AM
The question reads:
A company shows $22,000 of insurance expense for the fiscal year. The company records showed a balance in prepaid insurance at the beginning of the year of $5,000 and a balance at the end of the year of $3,000. What amount of cash was paid for insurance during the year?
I think that the answer is 22,000 since that is the amount purchased in the expense account and needs to move to the prepaid insurance account. The question is not asked how much was used, is this correct?