If insurance coverage for the next three years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

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This statement is true. When insurance coverage is paid for in advance, the payment is debited to the asset account called Prepaid Insurance. This account is classified as a current asset since it represents an expense that has been paid in advance and will be used up over time as the insurance coverage is utilized.

If Insurance Coverage for the Next Three Years Is Paid