Accounting of insurance premuim
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 April 2013
Dear Experts,
We have taken a vehicle Insurance for a period starting from 20/11/2012 to 19/11/2013 by paying a premium of Rs. 4060. But on 28/01/2013, we have sold the vehicle. Now we have to do the accounting for the same. How the Premium amount will be recorded in the books of Accounts. Whether we need to account for prepaid for the period from 01/04/2013 to 19/11/2013? What if we should not do prepaid as the vehicle is not with us. Shall we expense the complete amount in the year 2012-13 as Insurance Expenses?
Please Guide me on the same.
Waiting to the response of experts.
We have taken a vehicle Insurance for a period starting from 20/11/2012 to 19/11/2013 by paying a premium of Rs. 4060. But on 28/01/2013, we have sold the vehicle. Now we have to do the accounting for the same. How the Premium amount will be recorded in the books of Accounts. Whether we need to account for prepaid for the period from 01/04/2013 to 19/11/2013? What if we should not do prepaid as the vehicle is not with us. Shall we expense the complete amount in the year 2012-13 as Insurance Expenses?
Please Guide me on the same.
Waiting to the response of experts.
26 April 2013
You can treat the whole amount paid as Expense for the year.
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