Content
An offsetting entry was recorded prior to the entry it was intended to offset. An entry reverses a transaction that was in a prior year, and which has already been zeroed out of the account. The Structured Query Language comprises several different data types that allow it to store different types of information… Stand out and gain a competitive edge as a commercial banker, loan officer or credit analyst with advanced knowledge, real-world analysis skills, and career confidence. A capital asset is an asset with a useful life longer than a year that is not intended for sale in the regular course of the business’s operation. Michael Logan is an experienced writer, producer, and editorial leader.
The company has paid $10,000 of the insurance premium for the entire year at the beginning of the first quarter. Let us look at the balance sheet at the end of one month on December 31, 2017. Insurance ExpenseInsurance Expense, also called Insurance Premium, is the amount a Company pays to obtain an insurance contract for covering their risk from any unexpected catastrophe. You can calculate it as a fixed percentage of the sum insured & it is paid at a daily pre-specified period. Insurance Expense, also called Insurance Premium, is the amount a Company pays to obtain an insurance contract for covering their risk from any unexpected catastrophe.
Normal Balances
A debit is not the normal balance for which account listed below? Dividends Cash Accounts Receivable Service Revenue None of the above.
Is insurance is an asset or liability?
All insurance policies become an asset once the plan matures — that is, you have paid for it and are credited with a lump sum.
Sometimes, businesses prepay expenses because they can receive a discount for prepayment. Prepaid expenses may also provide a benefit to a business by relieving the obligation of payment for future accounting periods.
Financial Accounting
Thus, when the normal balance makes a deposit, the bank credits the account (increases the bank’s liability). At the same time, the bank adds the money to its own cash holdings account. But the customer typically does not see this side of the transaction. Business TransactionsA business transaction is the exchange of goods or services for cash with third parties (such as customers, vendors, etc.). The goods involved have monetary and tangible economic value, which may be recorded and presented in the company’s financial statements. Another example of accrued revenue may include timing constraints, with large companies.
