Payment made in advance in return for insurance services that are to be rendered over a specified period of time. A person or entity who purchases prepaid insurance is called a policy holder. They are liable for any deductibles should an insurance claim be filed. This is accounted for as a short-term asset or a prepaid expense on company books.
Related information about prepaid insurance:
- prepaid insurance definition | AccountingCoach.com
A current asset which indicates the cost of the insurance contract (premiums) that have been paid in advance.
- Why is prepaid insurance a short term asset? | AccountingCoach ...
Prepaid insurance is usually a short term or current asset because the prepaid amount will be used up or will expire within one year of the balance sheet.
- Prepaid Insurance Definition | Investopedia
Payments that are made in advance for insurance services or coverage. The period for which insurance is prepaid is generally one year, but may exceed a year ...
- What is prepaid insurance? definition and meaning
Definition of prepaid insurance: Payment made in advance in return for insurance ... A person or entity who purchases prepaid insurance is called a policy holder.
- Accounting Principles I: Prepaid Expenses
Initially, she records the transaction by increasing one asset account (prepaid insurance) with a debit and by decreasing another asset account (cash) with a ...
- Two ways of accounting for prepaid expenses - Accounting Guide ...
Sep 14, 2010 ... On December 31, 20X0 the unused prepaid insurance expense of $3,000 (3 months: January 1, 20X1 – March 31, 20X1) will be considered ...
- How to Calculate Prepaid Insurance | eHow.com
How to Calculate Prepaid Insurance. As a business owner, you might make a decision to prepay your company insurance premiums. If you use an accrual basis ...
- How Would You Journalize Expired Insurance? | Chron.com
The total amount of prepaid insurance is not recorded as an immediate expense at ... Companies lose, or are said to have consumed, their prepaid insurance ...