Is insurance included in accounts payable?
submitted by andy

matobetobe

Yes, if it is outstanding.

Karl

INSURANCE is an asset account, never a liability or a payable. You don't get the insurance before paying for it. You always pay first.
Suppose an entity purchased a 2-yr insurance on Jan 1 for 2,000. On the date of purchase, the entry will be:
dr Insurance 2k
cr Cash 2k

At the end of the first year one-half of the insurance has already expired. This used part is no longer an asset but is expensed.

The entry on Dec 31 of that year is

dr Insurance Expense
cr Insurance

for the amount of the expired part.