himani (student) (39 Points)
26 July 2016An amt of say 70 lacs is paid to insurer on account of group mediclaim policy for employees, out of which Rs 25 lacs are recovered from employees as deduction from salary. Policy period is 1-10-2015 to 30-09-2016. Should the additional amt of 45 lacs be charged to profit and loss account of current 2015-16 completely or prepaid ins should be calculated ??
mohammad rasool baig
(Management Consultant)
(1026 Points)
Replied 27 July 2016
Prepaid insurance payment needs to be recognised in the financial statements.
Mukesh Kumar
(Accounts Manager)
(1466 Points)
Replied 27 July 2016
I THINK
YOU SHOULD DO AS
NET INSURANCE PAYMENT =70 LAC -25 LAC=45 LAC
1. DEBIT TO INSURANCE EXPENSES A/C =(45/365X NOS OF DAYS (DATE FROM 1.10.2015 TO 31.3.16))
2. DEBIT TO PERPAID EXPENSES A/C =(45/365* NOS OF DAYS (DATE FROM 1.4.16 TO 30.9.2016))
THANKS
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