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An asset created by prepayment of an insurance expense is: O Recorded as a debit to Unearned Revenue. O Recorded as a debit to Prepaid Insurance. O Recorded as a credit to Unearned Revenue. O Recorded as a credit to Prepaid Insurance. O Not recorded in the accounting records until the insurance period expires.

Answer :

A prepaid account, such as Prepaid Insurance, is debited and the cash account is credited whenever a payment is made that prepays a charge. This shows the prepayment as an asset on the balance sheet of the business.

Due to the fact that prepaid insurance is typically converted to cash or utilized right away, it is seen as a current asset. A financial resource that has been fully paid for by a company but won't be fully utilized until a later time is known as a prepaid asset. An cost that has been paid for but won't be used until a later date can alternatively be described as a prepaid asset. A financial resource that has been fully paid for by a company but won't be fully utilized until a later time is known as a prepaid asset. A paid-for cost that won't be used up is another way to describe a prepaid asset.

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