If the Balance of Prepaid Insurance Was the Same on January

question 105

Short Answer

If the balance of prepaid insurance was the same on January 1, 2016, and December 31, 2016, then the insurance expense would ____________________ the cash payments made for insurance during the year.

---

Definitions:

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect because customers default on payments.

Operating Expense

Costs necessary for maintaining the day-to-day operations of a business, excluding costs associated with the production of goods or services.

Net Price Method

A pricing strategy that applies discounts and allowances to the gross price to determine the final sale price.

Cash Discounts

Cash discounts are reductions in the price of goods or services offered to buyers as an incentive for early payment.