Recent activities in the marketplace have caused your company to comply with requests from 50 percent of your policyholders to cancel their policies. The company complies and refunds them amounts due. Your audit of this should ensure these refunds were charged against what account?

Question

Quizplus · Accepted Answer

The refunds for canceled policies should be charged against the unearned premium reserve, as this account represents the portion of premiums received that have not yet been earned due to the cancellation of the policies.

Recent Activities in the Marketplace Have Caused Your Company to Comply