For example, when the accounting periods are monthly, an 11/12 portion of an annually paid insurance cost is added to "prepaid expenses", which are decreased by 1/12 of the cost in each subsequent period when the same fraction is recognized as an expense, rather than all in the month in which such cost is billed. The not-yet-recognized portion of such costs remains as "prepayments" (assets) to prevent such cost from turning into a fictitious loss in the monthly period it is billed, and into a fictitious profit in any other monthly period.