How to Record Trade Marine Insurance
Accounting for insurance premiums paid specifically for cargo transport under trade finance terms (CIF/CIP).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Prepaid Insurance - Trade Cargo | Debit | 3,500.00 | - |
| Accounts Payable / Bank | Credit | - | 3,500.00 |
💡 Accountant's Note
Insurance for trade goods is initially recorded as a prepaid asset and amortized over the transit period or expensed immediately if immaterial.
Practitioner & Systems Framework
💻 ERP Architecture
Link the insurance cost to the 'Landed Cost' module for inventory valuation.
⚠️ Audit Flags
Matching of insurance certificates to specific bill of lading numbers.
📄 Required Documentation
Marine insurance policy and invoice from the underwriter.
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