Question

An employee is _________when a company purchases an insurance policy against losses from theft by that employee.

I have been looking online and in my textbook but can't find what the answer is.
Please help.

Its accounting 101

Answer 1

An employee is in a BOND when a company purchases an insurance policy against losses from theft by that employee.

Every business owners are advised to bond their employees under Employee Theft Bond upon hiring. This is to protect their businesses from employee theft and avoid possible bankruptcy. Despite rigorous filtering of new hires, there is still a big possibility that employees will steal from the company especially if company transactions are mostly done in cash to cash basis.