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    Blue Dolphin's Avatar
    Blue Dolphin Posts: 1, Reputation: 1
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    #1

    Jun 6, 2008, 05:02 PM
    Accrual and basis accounting
    On March 1,2003, a company paid a $16,200 premium on a 36-month insurance policy for coverage beginning on that date. How do you fill in the table for this?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jun 6, 2008, 08:04 PM
    I don't know what "table" you're using -- that's your book doing that. But when a company pays for insurance up front like that, it goes into the asset account Prepaid Insurance. And anything that is "paid" always subtracts from cash.
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