Accounting

How to Account for Prepaid Insurance? (Definition, Classification, Journal Entries, and Example)

Definition Prepaid Insurance can be defined as the charge that is associated with the insurance contract, which has been paid in advance by the company the insurance company for the coverage period and sum insured based on insurance policeis. In other word, prepaid insurance is simply the amount expended for a given insurance contract, the …

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How to Calculate Average Total Assets? (Definition, Formula, Calculation, Example)

Definition of Average Total Assets Average Total Assets can be defined as the average amount of assets recorded on the company’s balance sheet at the end of two financial years: the current year and the preceding year. Average Total Assets represent the mean of the total wealth of the business during two timelines. This figure …

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How to Account for Dividends Paid? (Definition, Example, Journal Entry, And More)

Dividends can be defined as the share of profits that are paid to the investors or the shareholders of the company in return for their investment in the particular company for a period of time. Since shareholders are technically the owners of the company, they are compensated through a profit-sharing, on an annual, semi-annual, or …

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How to Record Accrued Salaries? (Definition, Journal Entries, and Example)

Definition of Accrued Salaries Accrued Salaries are defined as the current liabilities at the end of a given financial period for salaries and/or payroll expenses that have been incurred by the company, but are not yet paid for by the Company. The accrued salaries are debited in the salaries account of the income statement and …

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