Life Insurance Premium paid by Employer

Hi...book entry leave it..This is the case of personal expenses of directors incurred by the compnay(if contract with directors does not provide to effect this, its a violation). As a statutory auditor you have to comment u/s 227(1A)(e).

irrespective of contract between the directors and company this is directors personal expense borne by the company which has to be added to his income as perquisites. Company shall claim expense. Accounting entries : salary expense a/c debit to director Director a/c dr to LIC LIC a/c dr to bank

Hi guest. As per The Companies Act,1956 director is not eligible to receive salary from the company. If company provides in its AOA it can be paid sitting fees , fixed % of remuneration and other expenses which has incurred for official purpose. In whatever case may be you can not debit salary account. Please go through The Companies Act before making any public statement. thanks

Whether in the books of the company insurance paid is claimed as expenditure or not please clear

The company pays the LIC Premium on the policy taken on the life of its directors. Section 227(1A)(e) says, the auditor has to report the personal expenses of directors charged to revenue, if any. This section does not say there needs to be a contract between the company and directors (to my knowledge). The company can very well pass the entries which are given by Mr.Guest. Mr.Satyanarayana, the fixed % of salary mentioned by you can be given to the director in any way. One of such way is paymnet of LIC Premium on behalf of director. Thats all.

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can any one help me about prepaid expenses.