LIC Policy
This query is : Resolved
17 June 2010
Respected Freinds,
I am an accountant of a individual having business. My client has taken out 20 different LIC policies for which an annula premium of Rs. 200000 is being paid every year. 1) Can i show the premium paid on the asset side of the balance sheet policy wise thereby strenthning my balance sheet instead of debiting it to Capital Account?
2)Also since i have maintained business books and personal books seperately, where will the effect of such transaction come. Payment is made out of business funds.
I am an accountant of a individual having business. My client has taken out 20 different LIC policies for which an annula premium of Rs. 200000 is being paid every year. 1) Can i show the premium paid on the asset side of the balance sheet policy wise thereby strenthning my balance sheet instead of debiting it to Capital Account?
2)Also since i have maintained business books and personal books seperately, where will the effect of such transaction come. Payment is made out of business funds.
17 June 2010
Debit Rs.200000/- in capital account as drawings (in business books) and credit the same in personal books in investment in firm and show amount of premium paid as investment in LIC Policies in assets side (in personal books)
18 June 2010
premium paid out of business fund is the Drewing debit in capital account.....
premium paid can not be shown on the asset side of the Balace sheet:
In india Life insurance Policy Consist of two parts i.e. Insurance Risk portion and investment portion.....
Only investment portion i.e. Surrender value of the Policy can be shown in the asset side of the Balance Sheet....
premium paid can not be shown on the asset side of the Balace sheet:
In india Life insurance Policy Consist of two parts i.e. Insurance Risk portion and investment portion.....
Only investment portion i.e. Surrender value of the Policy can be shown in the asset side of the Balance Sheet....
18 June 2010
Agreed with experts.
If the person has maintained business book and personal book seprately. It is better to shown LIC in book of balance sheet of Personal book.
In books of Business , Premium is treated as drawing.
If the person has maintained business book and personal book seprately. It is better to shown LIC in book of balance sheet of Personal book.
In books of Business , Premium is treated as drawing.
18 June 2010
agree with Mr. Bansal
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