9 NYCRR 1642-6.6

Alternative procedures for handling advance or deposit premiums on workmen's compensation insurance are possible depending on whether the emphasis is placed on the advance or deposit aspects of such premium. In order to attain uniform accounting practice and terminology, however, the advance or deposit premium for workmen's compensation insurance should be charged to account 1212, Anticipated Returnable Premiums. At the end of each quarter, the periodical charge based on the actual payroll should be made to cost or expense and the liability accrued in account 2136, Accrued Insurance. At the end of the policy period, the insurance carrier will, generally speaking, make an audit of the payroll for the period and render an invoice, debit or credit, for the adjusted premium due. The bookkeeper will check the invoice in order to determine whether or not the invoice as submitted by the insurance carrier is correct. If the invoice is correct, the accrued liability account (2136) should be adjusted in accordance with the invoice. The deposit premium (1212) is then applied against the accrued liability account (2136) by means of a journal voucher. Any excess of deposit premium over the accrued liability, as adjusted, should be recovered from the insurance carrier.