Which of the following accounts is adjusted with a credit for the amount of expired insurance at the end of an accounting cycle?
A) Insurance Expense account
B) Insurance Payable account
C) Prepaid Insurance account
D) Insurance Receivable account

Question

Quizplus · Accepted Answer

Prepaid Insurance account is adjusted with a credit for the amount of expired insurance at the end of an accounting cycle. This is because prepaid insurance is an asset account and has a normal debit balance. When the insurance expires at the end of the period, the amount of the expired insurance is recognized as an expense and the prepaid insurance account is reduced with a credit entry.

Which of the Following Accounts Is Adjusted with a Credit