Under the accrual basis of accounting, insurance expense is the cost of insurance that has been incurred, has expired, or has been used up during the current accounting period for the nonmanufacturing functions of a business. A manufacturer will report on its income statement the insurance expense...
Since final expense insurance is a type of whole life insurance policy, it offers a cash value component. This part of the policy allows the policyholder to accumulate assets aside from the death benefit. The cash value may also earn interest depending on the terms stated in your policy. Poli...
Even though multiple expense accounts may exist, companies may only use one prepaid insurance asset account. The use of one asset account is possible, as each prepaid insurance policy is an asset and rarely needs separation on the company’s general ledger to determine the value of each policy...
Legal expense insurance is a type of insurance coverage in which the insured transfers the risk of litigation to an insurance...
Business Overhead Expense (BOE) Insurance is designed to reimburse the company for certain business expenses should the business owner become disabled.
As the amount of prepaid insurance expires, the expired portion is moved from the current asset account Prepaid Insurance to the income statement account Insurance Expense. This is usually done at the end of each accounting period through an adjusting entry. Example of Prepaid Insurance To illustrat...
Fixed Expense (Definition) A fixed expense is an expense for a company that is the same amount every time it is paid. Business owners usually pay these weekly, monthly, quarterly, or annually and they are generally easy to budget for. It can include things like mortgage or rent payments, ...
A savings account can help you build an emergency fund and save for a major expense. What is a savings account? A savings account is a basic type of deposit account that enables you to put your money in a bank or credit union and earn interest on your funds. You can find savings ac...
Final expense life insurance is designed to solve this problem. “The insurance companies built these policies to absorb the risk of some serious medical issues,” says Anthony Martin, CEO ofChoice Mutual, a final expense life insurance brokerage company. “This means that most seniors, despite p...
Consider a manufacturer that purchases a property insurance policy to protect itself from fires. The company determined that the cost of relocating in the event of a fire would be expensive, so it also purchases an extra expense insurance policy. After an unexpected fire, the manufacturer is forc...