Recording Purchases and Cash Payments a. What term is used to describe the payment for

Chapter 15, Problem 5

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QUESTION:

Recording Purchases and Cash Payments

a. What term is used to describe the payment for insurance coverage?

b. What account is debited when insurance is purchased?

Questions & Answers

QUESTION:

Recording Purchases and Cash Payments

a. What term is used to describe the payment for insurance coverage?

b. What account is debited when insurance is purchased?

ANSWER:

                                                                  Step 1 of 3

Insurance is the tool used by business to reduce the level of the risk. Cost incurred to purchase the insurance is considered as the insurance expense in the income statement.

                                                                 

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