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No, if Insurance premium is paid in advance then it is a Prepayment - current asset.
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What is the difference between out standing expense and prepaid expenses?
Outstanding Expenses are expenses which are due at a specific point of time for example if the actual date to pay the rent is 1st july and we don't pay the rent till august end, then it is called the outstanding Expenses (outstanding rent) prepaid Expenses are expenses which are paid in advance for example if we paid the premium of Insurance in advance i.e before due date, then it calls the prepaid expenses.
What are some examples of periodic expenses?
Example of periodic expenses are; Car insurance premium,property taxes, holiday expenses, expenses on certain seasonal activities.
What is the journal entry for advance insurance premium paid in cash?
prepaid insurance a/c..........dr. To insurance a/c
What is the journal entry for payments of insurance premium?
debit insurance premium expensecredit cash / bank
Is an insurance expense an account payable?
No, insurance expense is not a liability but rather an operating expense. Expenses are listed on the Income statement and are taken out of gross income (revenue). It is very doubtful you will ever see insurance of any type listed in the liability section of the balance sheet. Expenses are never listed as a liability but when creating a trial balance, post closing trial balance etc. Expenses are listed under the asset section. This is mainly due to the fact that expenses increase with a debit and decrease with a credit, similar to that of assets, however expenses are neither listed as an asset or liability but rather an operating expense. The only time insurance is listed as an asset is when it is prepaid. Prepaid insurance (insurance paid in advance) is an asset account. For example, Company X pays $12,000 for a one year insurance policy on January 15th, the policy renews the 15th each month. The first recording of the transaction will be listed as; Prepaid Insurance (dr) $12,000 Cash (cr) $12,000 After the initial posting adjusting entries will be made accordingly. On February 15th the company will adjust the previous entry; Insurance Expense (dr) $1,000 Prepaid Insurance (cr) $1,000 January premium expired.
What is unexpired expense?
those expenses which have been paid in advance and whose benefit will be available in future are called unexpired or prepaid expenses. e.g. insurance premium
What is insurance premium paid in advance called?
Prepayment of the premium before it is due.
What is the difference between out standing expense and prepaid expenses?
Outstanding Expenses are expenses which are due at a specific point of time for example if the actual date to pay the rent is 1st july and we don't pay the rent till august end, then it is called the outstanding Expenses (outstanding rent) prepaid Expenses are expenses which are paid in advance for example if we paid the premium of Insurance in advance i.e before due date, then it calls the prepaid expenses.
What are some examples of periodic expenses?
Example of periodic expenses are; Car insurance premium,property taxes, holiday expenses, expenses on certain seasonal activities.
Distinguish between outstanding expenses and unexpired expenses?
Those expenses which have been paid in advance and whose benefit will be available in future are called unexpired or prepaid expenses. e.g. insurance premium The expenses remaining unpaid at the end of the accounting period are called outstanding expenses.Certainly expenses like salaries,rent etc. of the every month will be paid in the next months. By ADITYA (UPES)
What does personal accident insurance cover?
Personal accident insurance covers the insurance in case of an accident during working hours and leisure time. Accident insurance varies based on the premium, but it usually covers the hospital expenses and additional expenses.
What is the journal entry for advance insurance premium paid in cash?
prepaid insurance a/c..........dr. To insurance a/c
What is Advance Premium Deposit in Insurance Company?
An Advance Premium Deposit account is a feature of a policy offered by a Life Insurance company. Think of it as a savings account, where you're free to put in money and take out money. Your life insurance premium will automatically be paid from that account, so that's one less hassle you have to worry about. You get interest on your money, so that's nice. Often you're only allowed to deposit up to the sum of all future premiums. See http://www.americansavingslife.com/policy-sales/advance-premium-deposit-(apd) for an example of one company's advance premium desposit account and read what they have to say about it.
What is Medical Insurance Premiums?
The price one would pay for Health Insurance.
What is a single premium life insurance?
single premium life insurance: Single premium life insurance is a form of life insurance that's paid with one upfront lump-sum premium. Once you've purchased a single premium policy, you would receive a permanent death benefit that extends until you die.
What is payment for insurance?
Payment of insurance is nothing but the premium paid towards the insurance policy. The premium amount includes the charge of coverage per unit (for example, the charge of coverage for $1000 might be $10. So, to have an insurance coverage for $10,000 the charge of coverage would be $100) plus the expenses incurred by the insurance company for the policy.
What is health insurance?
Health insurance is a type of insurance that covers medical expenses that arise due to an illness. These expenses could be related to hospitalization costs, cost of medicines, or doctor consultation fees.
