Is paying for an insurance policy accounts payable?
submitted by Nova Caine

yeahno

Paying for an insurance policy isn't usually considered accounts payable because you're paying in advance or immediately. Accounts payable is for bills you owe but haven't paid yet, like when you get an invoice for services, but you haven't paid yet. If you pay upfront, it's more like prepaying, which isn't a liability.

jimbo

Not exactly. When you pay for an insurance policy, it might be recorded as a prepaid expense (which is an asset), because you're paying for services for some period into the future. Accounts payable is just used when you've received something but haven't paid yet. Since you're paying upfront, it's more of a cash outflow and recorded as a prepaid expense or insurance expense, depending on the timing.