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Insurance Policy
A contract between an insurer and a policyholder that specifies the terms and conditions under which the insurer will compensate the policyholder for loss.
Adjusting Entries
At the close of an accounting period, journal entries are made to apportion income and spending to the timeframe in which they legitimately took place.
Prepaid Insurance
Payments made in advance for insurance coverage, recorded as an asset on the balance sheet until the coverage period elapses.
Adjusting Entries
Entries in accounting made at the period's end to assign earnings and costs to their respective actual periods.
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