It is a statement of transactions in a debit and credit form between a seller and his customer. It is a statement of transactions which represents running transactions between parties. It is periodically prepared and sent by a trader to his debtor or creditor with a view to verifying balance between them. It includes interest received or charged on transactions. It is a summary statement detailing the financial performance of an individual insurance agent’s business over a specified period. This statement details the monetary transactions that they have in their name. There are two parties involved, one who prepares the Account and the other for whom the account is prepared.
Methods of Preparing an Account Current –
- When frequent transactions regularly take place between two parties, they prepare Account current.
- In the case of consignment, the consignee prepares it.
- When frequent transactions occur between banks and customers.
- In case of a joint venture and each co-venture is entitled to interest.
Account Current is a record of business transactions that shows the total amount of money owed as of the date of the summarizing statement. For example, it is a monthly statement to the insurer by its agent showing policy numbers, premiums written, return premiums, commissions, and net amount due to or from the insurer. These transactions involve the premium payments, commissions, approved policies and canceled policies. The statement is usually comprehensive in that it specifies premium and claims performance at the individual policy level.