Asset, debit is the type of account and normal balance of prepaid insurance.
To add, prepaid insurance is the portion of an insurance premium that has been paid in advance and has not expired as of the date of the balance sheet.
Answer:
d. asset, debit
Explanation:
Prepaid Insurance is a form of an advance payment for insurance to be enjoyed in time to come. To account for prepaid insurance when payment is made to the insurance company, the following entries are passed;
Debit Prepaid Insurance
Credit Cash account
Being entries to record cash paid for prepaid insurance.
The prepaid insurance is a current asset where the insurance is to be used up in 12 months or less.
From the above, this is a debit account.
As such, the right answer is d. asset, debit.
