The Chase Ink Business Preferred® earns valuable Ultimate Rewards points, which provides a lot of redemption flexibility. Cardholders can redeem points through the Ultimate Rewards Travel portal at 1.25 cents each. So the 100,000-point welcome bonus could be worth $1250 towards flights, hotels, cruises, tours and activities. While large business data security and privacy the welcome bonus isn’t very high at 20,000 points (worth $200), the card does offer an introductory 0% APR on purchases for the first 12 months. Overall, the Wells Fargo Autograph℠ Card provides exceptional value for a no-annual-fee card. The best way to redeem your Amex Platinum’s 80,000-point welcome bonus is for travel.

The term prepaid insurance refers to payments that are made by individuals and businesses to their insurers in advance for insurance services or coverage. Premiums are normally paid a full year in advance, but in some cases, they may cover more than 12 months. When they aren’t used up or expired, these payments show up on an insurance company’s balance sheet.

Together with expanding roles, new expectations from stakeholders, and evolving regulatory requirements, these demands can place unsustainable strain on finance and accounting functions. Centralize, streamline, and automate end-to-end intercompany operations with global billing, payment, and automated reconciliation capabilities that provide speed and accuracy. Ignite staff efficiency and advance your business to more profitable growth. Make the most of your team’s time by automating accounts receivables tasks and using data to drive priority, action, and results. When the debit to the Prepaid Expense account is posted to the general ledger, the Prepaid Expense account will have a debit balance of $600. Accounting equation can be used to show the economic effects of an accounting transaction.

What is Prepaid Insurance?

You can book flights, hotels, cruises, rental cars and activities using your points. The best part is that you can earn airline miles on flight bookings by providing your frequent flyer number. The market, however, is saturated with travel credit cards for every type of traveler. Prepaid insurance is recorded in the general ledger as a prepaid asset under current assets.

• It also sets up automatic monthly adjusting entries to debit Insurance Expense for $200 and to credit Prepaid Insurance for $200 on the last day of each month.
• However, the premiums may be marginally higher to account for inflation and other operating factors.
• In an era of overcrowded airports and packed flights, this perk can be a lifesaver.
• Even if Hilton doesn’t have standard rooms available, you can pay a higher points rate to book premium rooms and suites.

Three levels of transaction analysis will be adopted (that is, the basic analysis, analysis using accounting equation, and debit-credit analysis). According to those analyses, you will easily understand how transactions are recorded in the general journal. The expense would show up on the income statement while the decrease in prepaid rent of $10,000 would reduce the assets on the balance sheet by $10,000. Upon signing the one-year lease agreement for the warehouse, the company also purchases insurance for the warehouse.

Why Is Prepaid Insurance Important?

Any remaining prepaid portion of the premium could be redeemed or refunded to the business if the business cancels the policy before the period covered by those premiums has expired. In exchange, the insurance company usually offers the customer a discount on the premium price, so the business saves money on the policy. The revenue cycle refers to the entirety of a company’s ordering process from the time an order is placed until an invoice is paid and settled. The inability to apply payments on time and accurately can not only lock up cash, but also negatively impact future sales and the overall customer experience. According to the debit-credit rule, the decrease in assets is credited. The payment in cash means that the cash paid is no longer held by the company.

The card doesn’t offer any cash back, interest payouts or other rewards, but that’s to be expected from a free checking account aimed at minors. Chase doesn’t allow users of this account to access peer-to-peer payment services such as Zelle or Venmo, set up direct deposit, take out more than $100 from an ATM daily, or make more than $400 in purchases a day. Parents simply set up a recurring transfer for a set amount either daily, weekly, or monthly. Or they can assign recurring chores or one-time tasks in the app that pay out a certain sum when completed. The most important calculation regarding prepaid insurance reflects the unexpired portion of the policy. Prepaid insurance is important because a business should correctly record all of its transactions and resources to have accurate financial statements.

You can redeem points for travel bookings at 0.7 cents each or transfer them for even more value. American Express Membership Rewards has 17 airline and three hotel transfer partners. With 80,000 points, you can book up to four round-trip economy flights to the UK using Virgin Atlantic points. If you’d rather fly in a premium cabin, you can transfer your points to the Flying Blue program and book a one-way award flight to Europe, with enough leftover for an economy class return. The American Express Platinum Card is a premium travel rewards card that offers an unparalleled range of benefits.

Prepaid Cards and Deposit Insurance Coverage

While some travel cards have high annual fees, they can be worth it depending on the perks offered. For example, many premium credit cards offer travel statement credits that can offset the annual fee entirely. In an era of overcrowded airports and packed flights, this perk can be a lifesaver.

All these features are why we named this card Best Free Debit Card for Younger Kids. Chase’s First Banking debit card does come with one big limitation, however. Parents must be existing Chase bank customers to access this card for their children.

BlackLine’s foundation for modern accounting creates a streamlined and automated close. We’re dedicated to delivering the most value in the shortest amount of time, equipping you to not only control close chaos, but also foster F&A excellence. The path from traditional to modern accounting is different for every organization. BlackLine’s Modern Accounting Playbook delivers a proven-practices approach to help you identify and prioritize your organization’s critical accounting gaps and map out an achievable path to success.

Who should get a travel card?

This means the company should record the insurance expense at the period end adjusting entry when a portion of prepaid insurance has expired. On July 1, the company receives a premium refund of $120 from the insurance company. The company records the refund with a debit to Cash and a credit to Prepaid Insurance. At December 31, the balance in Prepaid Insurance will be a credit balance of $120, consisting of the debit of $2,400 on January 1, the 12 monthly credits of $200 each, and the $120 credit on July 1. Prior to issuing the December 31 financial statements, the company must remove the $120 credit balance in Prepaid Insurance by debiting Prepaid Insurance and crediting Insurance Expense. Assume that a company’s annual premium on its liability insurance policy is $2,400 and is due on the first day of each year.

It would be entered into the general ledger as a debit of $12,000 to the asset account and a credit for the same amount to the cash account. Insurance providers may allow a business to pay multiple monthly premiums in advance, in the form of one lump sum. For the insurance company, it generates more working capital and greater customer retention. Likewise, the net effect of the prepaid insurance journal entry in this example is zero on the balance sheet. This is due to one asset increases $1,200 and another asset decreases $1,200. Prepaid insurance works similarly to many products or services you pay for fully in advance.

Free Financial Statements Cheat Sheet

And of course, credit cards that waive foreign transaction fees are a must. You don’t want to be on the hook for a 3% fee every time you use your card overseas. With the right travel credit card, you can earn valuable rewards for every dollar you spend. These can be redeemed for free flights, hotel stays, car rentals and more. You can also take advantage of exclusive discounts and promotions at participating merchants.

If your bank classifies prepaid insurance as a deposit account, then it will be treated as a type of credit. If your bank classifies prepaid insurance as a type of loan you borrow against, then it will be treated as a type of debit. As prepaid insurance is an asset that will expire through the passage of time, the cost of expiration will need to be recognized as an expense during the period.

By outsourcing, businesses can achieve stronger compliance, gain a deeper level of industry knowledge, and grow without unnecessary costs. Global and regional advisory and consulting firms bring deep finance domain expertise, process transformation leadership, and shared passion for customer value creation to our joint customers. Our consulting partners help guide large enterprise and midsize organizations undergoing digital transformation by maximizing and accelerating value from BlackLine’s solutions. Your success is our success.From onboarding to financial operations excellence, our customer success management team helps you unlock measurable value.

This means that the debit balance in prepaid insurance on December 31 will be $2,000. This translates to five months of insurance that has not yet expired times $400 per month or five-sixths of the $2,400 insurance premium cost. We also favored cards that were easy to obtain and for parents to monitor with a well-reviewed app experience. Plus, the card offers access to a suite of travel protection benefits like trip cancellation and interruption insurance, primary rental car coverage and cell phone protection. With all these features combined, the Ink Business Preferred® is ideal for business owners looking for a reliable travel credit card with great rewards and benefits.

Streamline and automate detail-heavy reconciliations, such as bank reconciliations, credit card matching, intercompany reconciliations, and invoice-to-PO matching all in one centralized workspace. As stated above, FDIC deposit insurance coverage applies only when a bank fails. Please remember that deposit insurance does not apply in other situations, such as where your card is lost or stolen or your card provider declares bankruptcy. However, in those situations, other legal options may be available to you to pursue recovery of your funds. For example, on December 18, 2020, the company ABC make an advance payment of $6,000 for the fire insurance that it purchase to cover the whole year of 2021. Company XYZ has paid an insurance expense of $500 for the next quarter.

The best travel credit card depends on your individual needs and preferences. Some of the most popular travel credit cards include the Chase Sapphire Preferred Card, Capital One Venture X and American Express Platinum Card. Another key factor to consider when selecting a travel credit card is the rewards program.