Which type of accounting is primarily responsible for recording transactions such as taking receipt of premiums and holding them for the insurance company?

• A. Insurance Accounting
• B. Tax Accounting
• C. Cost Accounting
• D. Governmental Accounting

Answer: (A)

Verified step by step guidance

1. Understand the context of the question: The problem is asking about the type of accounting that deals with recording transactions related to premiums and their management for an insurance company.
2. Review the definitions of the accounting types provided: Insurance Accounting, Tax Accounting, Cost Accounting, and Governmental Accounting.
3. Focus on Insurance Accounting: This type of accounting is specifically tailored to the insurance industry, where transactions like receipt of premiums and their allocation are recorded and managed.
4. Compare Insurance Accounting with the other options: Tax Accounting deals with tax-related matters, Cost Accounting focuses on cost management and analysis, and Governmental Accounting pertains to public sector financial management.
5. Conclude that Insurance Accounting is the most relevant type for recording transactions such as taking receipt of premiums and holding them for the insurance company.