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Old 05-21-2019, 08:18 PM #101
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Quote:
Originally Posted by bballchump11 View Post
I know you know nothing about finance or accounting, but I'll try to hold your hand through it.

If an insurance company gets a customer to prepay their insurance for 6 months, they'll get an influx of cash all at once. Lets say for $600. That is all the cash they'll be getting until that customer prepays again.

For month 1, the company's cash from operations is $600. Their actual revenue for the month will be $100 if the insurance was paid at the beginning of the month.

Once the cash is received
Debit cash $600
Credit prepaid revenue (liability) $600
Monthly revenue recording
Debit prepaid revenue $100
Credit revenue $100
For the month a May, they'll be in the red again.
lol. You tried hard for that one.

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