Is prepaid insurance debit or credit on unadjusted trial balance sheet?

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2026-05-04 19:25

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Prepaid insurance is recorded as a debit on the unadjusted trial balance sheet. It represents an asset, reflecting payments made in advance for insurance coverage that will benefit future periods. As time passes and the coverage is used, it is then gradually expensed, decreasing the prepaid insurance account and increasing insurance expense.

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