My grammar is 💯 good I
7296 Points
Joined March 2019
@ Surinder
Please find out under what accounts you have purchased the insurance account then derecognise the prepaid insurance.
when you purchased:
Insurance expense a/c 9100₹ income statement
Payables a/c 9100₹ balance sheet liabilities
once you received your policy and cheque is cleared
Insurance a/c 9200 balance sheet current assets
Bank a/c 9200 balance sheet current assets
when you cancelled it and received a refund,
Bank a/c 8100₹ Balance sheet current assets
Loss on insurance 1100₹ Income statement profit and loss account
To Prepaid insurance 9200₹ Balance sheet current assets