GST Course
CA Final Online Classes
CA Classes

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Treatment of insurance premium.

This query is : Resolved 

why insurance premium paid is treated as an expense item in accounting, despite it is received back after the policy is matured?

Insurance Premium for Stocks, business assets only treated expenses item . This type of insurance only covers the risk of loss of business asset. No amount is received back after the term is over. In case of LIC where the premium is received back is an personal insurance and hence debited to capital account as drawings and not debited to business expenses.

It is a satisfactory answer.
Thank You !



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


Similar Resolved Queries

loading





Trending Tags