If amount of insurance in trial balance as on 31 march 2018 is 600 ,What will be the amnt written to profit&loss a/c
if the insurance includes a premium of Rs170 on a policy expiring on 30 sep 2018???
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Replies (5)
Since insurance is for 12 months there fore insurance from 01.04.18 to 30.09.18 will be prepaid insurance.
= 170x6/12= 85.
Charge insurance i.e. 430(600-170) + 85 = 515 to Profit and loss account.
= 170x6/12= 85.
Charge insurance i.e. 430(600-170) + 85 = 515 to Profit and loss account.
yes,this is the suggested answer,but i took the whole 170 as prepaid insurance.
Do we assume that the insurance is for 12 months??
what made you to this conclusion from the question??
Do we assume that the insurance is for 12 months??
what made you to this conclusion from the question??
since genral insurance is always for 12 month, therefore i had taken 12 months
ok. Thanks
good clarification and information
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