Prepaid insurance is reported on the balance sheet as a

fixed asset
current asset
long-term liability
current liability

Expert Solution

Prepaid insurance means insurance amount paid in advance but not in due to pay. Prepaid insurance is current asset and it should be shown in balance sheet under Assets side. Insurance premium paid in advance, hence it should be recorded as current asset in balance sheet.

B - Current asset

Dr. OWL answered 3 years ago

X Company has several insurance policies covering different periods. On the Balance Sheet, Prepaid Insurance at...

X Company has several insurance policies covering different periods. On the Balance Sheet, Prepaid Insurance at the beginning of the period was $23,316; Prepaid Insurance at the end of the period was $25,701. Insurance expense for the period was $30,393. What were the insurance premium payments during the period?

Which of the following statements related to the balance sheet account ‘Prepaid Insurance’ are correct? Select...

Which of the following statements related to the balance sheet account ‘Prepaid Insurance’ are correct? Select as many as you think are true. Select one or more: Current tax liability will be higher if more insurance is paid in advance than expensed during the year. 1.Balance day adjustments recognise the amount of prepaid insurance paid during the period. 2.Represents a tax asset in the future. 3.If no insurance is paid in a period, there is no tax deduction. 4.Represents a...

the prepaid balance in the prepaid insurance account represent the remaining balance of two year policy...

the prepaid balance in the prepaid insurance account represent the remaining balance of two year policy purchased in April 2010 trial balance unjusted 31 October 2011 prepaid insurance 9350 the office furniture was purchased in March 1 2010 and has estimated useful life of two years of use it is expected that the furniture will be worthless office furniture October 31 2011 unjusted trial balance 61440 what are the adjustments t for this two transactions

An insurance company reported the following balance sheet at year end for 2009 (all amounts are...

An insurance company reported the following balance sheet at year end for 2009 (all amounts are in millions of dollars) Assets Investments $1500 Insurance assets 300 Total 1800 Liabilities and equity Insurance claims 700 Unearned premiums 140 Long-term debt 150 Equity 810 Total 1800 Investments are available-for-sale securities marked to market. The company reported the following income statement for 2010 Premium revenue 365 Investment income 60 Realized gains on investments 80 Total revenue 505 Insurance losses and expenses 405 Net...

The prepaid insurance account had a balance of $7,000 at the beginning of the year

Adjusting Entries for Prepaid InsuranceThe prepaid insurance account had a balance of $7,000 at the beginning of the year. The account was debited for $24,000 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:a. The amount of unexpired insurance applicable to future periods is $8,500.Insurance ExpensePrepaid Insuranceb. The amount of insurance expired during the year is $22,500.Insurance ExpensePrepaid Insurance

The balance in the prepaid insurance account, before adjustment at the end of the year, is...

The balance in the prepaid insurance account, before adjustment at the end of the year, is $27,000. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: a. The amount of insurance expired during the year is $20,250. * Insurance expense = $20,250 * Prepaid Insurance = ? b. The amount of unexpired insurance applicable to future periods is $6,750. * Insurance expense = ? * Prepaid Insurance = $20,250

on the end-of-period spreadsheet, prepaid insurance has a balance of $2400 in the unadjusted trail balance...

on the end-of-period spreadsheet, prepaid insurance has a balance of $2400 in the unadjusted trail balance debit column and an adjustment of $200 in the adjustments credit column. what amount should appear for prepaid insurance in the adjusted trail balance column and ultimately the balance sheet?

The beginning prepaid insurance balance for a firm is $80,000. The tax rate is 30% and...

The beginning prepaid insurance balance for a firm is $80,000. The tax rate is 30% and the beginning DTL balance therefore is $24,000. During the year, $60,000 of insurance expense was recognized and $20,000 of insurance was prepaid at year-end. What is the ending DTL balance if the tax rate in future years was changed to 20% in the current year? 20,000 16,000 4,000 8,000 12,000

The Prepaid Insurance account has a normal balance of $5,625 at the beginning of the month....

The Prepaid Insurance account has a normal balance of $5,625 at the beginning of the month. The company used $1,470 of insurance coverage during the month. Which of the following statements is correct? The company should credit Insurance Expense for $1,470 and debit Prepaid Insurance for $1,470. Retained earnings will decrease and stockholders' equity will increase. The company should debit Insurance Expense for $1,470 and credit Prepaid Insurance for $1,470. Retained earnings and stockholders' equity will both increase.

Adjusting entry the prepaid insurance account is reported at $800 on the December 31, 2019, unadjusted...

Adjusting entry the prepaid insurance account is reported at $800 on the December 31, 2019, unadjusted trial balance. Analysis of the insurance coverage reveals that the company has two policies that were acquired at the same premium : A- policy A for 3 years was acquired on January 1, 2017. b- policy B for 2 years was acquired on January 1, 2019.

Question