A liability account that reports an insurance company’s premiums received from its insured that have not yet been earned. For example, if the insurance company receives $600 on January 27 for an insured’s insurance coverage for the period of February 1 through July 31, the $600 has not been earned as of January 31. The insurance company will report the $600 in its Cash account and should report $600 as a current liability in the account Unearned Premium Revenue. As the premium is earned, the insurance company will move the amount earned from the liability account to a revenue account on its income statement.
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