Insurance Premium:An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. The life insurance premium should be classified as unearned revenue because against this amount still the company has to render service. Actually, the insurance company will treat each year pro-rata amount of premium received as income. Unearned Revenue:Unearned revenue, sometimes referred to as deferred revenue, is payment received by a company from a customer for products or services that will be delivered at some point in the future. The term is used in accrual accounting, in which revenue is recognized only when the payment has been received by a company AND the products or services have been delivered to the customer. Some examples of unearned revenue include advance rent payments, annual subscriptions for a software license, and prepaid insurance. Therefore, Life insurance premiums received by an insurance company should be classified as unearned revenue. Accrued Asset: The revenue a company earns over a period of time but has not collected by the end of a reporting period. For example, if a company makes $1 million in revenue but has not collected $250,000 before it must make its quarterly statement, it lists that amount as its accrued assets. Accrued Liability: Accrued liabilities are liabilities that reflect expenses that have not yet been paid or logged under accounts payable during an accounting period; in other words, a company's obligation to pay for goods and services that have been provided for which invoices have not yet been received. Prepaid Expenses: Prepaid expenses are future expenses that have been paid in advance. In other words, prepaid expenses are costs that have been paid but are not yet used up or have not yet expired.