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Other income or Expense?
Our Health insurance company in this current year, refunded an employees prior year premium. Would this get booked to other income or credit the current year expense?
I elect other income, to eliminate understated expense in current year. |
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To book it as income would be misleading because it suggests that it is money that the company has made by carrying out its activities when in fact it's a refund of an expense that has already been paid. I would therefore credit it to the current year expense.
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