Is insurance a liability or an asset?

Question

i'm doing grade 11 correspondence for accounting and i dont know whether to put insurance as an asset or a liability.

Answer 1

it's an expense, so liability.

Answer 2

From an accounting standpoint, for a typical insurance program the policy premiums are expenses.  There really is no asset or liability recorded on the balance sheet for the policy.

You could have prepaid insurance which is an asset.  Or insurance payable which is a liability.  But those are dependent on the timing of payments and would be the same for other expenses such as rent or taxes.

Answer 3

Unless it's a life insurance policy with a cash value (at which point the cash could be listed as an asset) it's neither.  There is no value to it so it's not and asset and they don't "have" to pay it so it's not a loan or a liability.  The proceeds would go to cash and be listed there.

It's merely an expense like payroll, rent, utilities, etc.. and would be part of the income statement.

Hope that helps.

Answer 4

asset to have depends on what u have