What is insurance classified as in Accounting

Insurance expense will be one of the categories that your income statement lists as an expenditure. Because the income statement reflects business activity over a period of time, this line on your income statement will aggregate any insurance payments your business made during the period that the statement covers.

What is insurance expense classified as?

Insurance expense will most often be considered an operating expense, and for many companies, it is tax-deductible.

Is insurance 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.

Where do you put insurance in accounting?

At the end of any accounting period, the amount of the insurance premiums that remain prepaid should be reported in the current asset account, Prepaid Insurance. The prepaid amount will be reported on the balance sheet after inventory and could part of an item described as prepaid expenses.