there is prepaid insurance in B/S but during the year company has sold car but company has paid insurance for the same in last year.how this prepaid insurance is to be treated?
option1
insurance A/C.............dr
To prepaid insurance
or
sale of car A/C..............dr
To Prepaid insurance A/C
please solve this query its very urgent.
or any other treatment which is appropriate according to you??
1) SUCH INSURANCE IS AN ASSET.
2) WHEN YOU SELL YOUR CAR, ITS THE CAR BEING SOLD ALONGWITH THE INSURANCE. ALSO YOU NEED TO GET THE INSURANCE TRANSFERED IN COMPANIES NAME.
6) ENTRY: Bank a/c Debit-----to prepaid insurance
7) PLEASE CONSIDER THIS AND REPLY IF ANY ALTERNATIVE TREATMENT POSSIBLE- TO MY PM
i thnk raghav is right.....
CAclubindia
