Which of the following accounts would normally not be a part of the acquisition and payment cycle of prepaid insurance?
A) cash
B) insurance payable
C) insurance expense
D) prepaid insurance

Question

Quizplus · Accepted Answer

Insurance payable is not typically part of the acquisition and payment cycle for prepaid insurance because this cycle involves prepaying for insurance coverage, which directly impacts cash (payment goes out), prepaid insurance (asset increases), and insurance expense (expense recognized over time). Insurance payable would imply a liability related to insurance that is yet to be paid, which does not align with the prepaid nature of the transactions in this cycle.

Which of the Following Accounts Would Normally Not Be a Part