Pre-paid expenses


Chandra Shekhara .B (Finance Professional)     03 December 2012

Chandra Shekhara .B
Finance Professional 
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Hi Dear friends i have query Please help me out

How to pass the closing entry for the below expenses..?

 

Insurence amount paid 60000 on 30/9/2012  its valid til 30/9/2013, how we'l pass the closing entry while closing the books of accounts & for next year how wil pass the entrty close the insurance a/c.. Please rply ASAP

 

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CA. Subhash Dangi (Chartered Accountant)     03 December 2012

CA. Subhash Dangi
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Pass the closing entry as under if entire premium debited to Insurance expense account.

Prepaid Insurance Acoount  - Dr.  Rs.30000

To Insurance (Expns)                                            Rs.30000

(Being insurance for the period from 01.04.2013 to 30.09. 2013 is taken to Prepaid insurance A/c - Rs.5000X6 months)

 

Next year accounts, you reverse the entry.

Insurance (Expns) -Dr       Rs.30000

To Prepaid Insurance Acoount  -      .  Rs.30000

(Being reversal of prepaid insurance ......)

 

 

 

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Nithin Chettoor (Assistant Manager)     03 December 2012

Nithin Chettoor
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Insurance expenses A/c                             Dr.         30000 

Prepaid Insurance Premium A/c               Dr          30000  

                 To Bank A/c                                                                 60000

Profit & Loss A/c                         Dr       30000

       to Insurance expenses A/c                         30000

Prepaid insurance premium will go to balance sheet under current assets and next year on 30/09/2013, should pass the entry.

Insurance Expenses A/c                    Dr    30000

    to Prepaid Insurance Premium                          30000

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Pulkesh Mehta (Chartered Accountant)     03 December 2012

Pulkesh Mehta
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I think Sai Prasanna Kumar is not right because insurance exp. paid is Rs .60000 out of which Rs. 30000 is prepaid in F.Y.2012-13.

Entry at the time of payment

Insurance Exp. Dr.   60000

    To Cash/Bank          60000

On 31.03.13

1. Prepaid Exp. A/c  Dr. 30000

        To Insurance Exp.    300000

2. Profit & Loss Dr. 30000

          To Insurance Exp.   30000

 

On 01.04.2013

Insurance Exp, Dr. 30000

   To Prepaid Exp.    30000

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CA. Subhash Dangi (Chartered Accountant)     03 December 2012

CA. Subhash Dangi
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Pulkesh,

No need to pass 2nd entry as on 31.03.2013

2. Profit & Loss Dr. 30000          

To Insurance Exp.   30000

as the insurance expenses is a P& L item i.e, head of account.

 

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Chandra Shekhara .B (Finance Professional)     03 December 2012

Chandra Shekhara .B
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Thank You so much to all

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satish kumar voleti (A.C.A., (ICWAI))     03 December 2012

satish kumar voleti
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TOTAL INSURANCE PAID IS RS. 60000

FINANCEIAL YEAR 2012-13

Insurance Pre -Paid(prepaid Expenses CA Group)DR. 60000

 to Bank A/c                                                             CR. 60000

Insurance Expenses A/c                                                                DR. 30000

 to Pre - Paid Insurance                                                                  Cr.  30000

 

FINANCEIAL YEAR 2013-14

Insurance Expenses A/c                                                                DR. 30000

 to Pre - Paid Insurance                                                                  Cr.  30000

 

Sai Prasanna Kumar (MBA)     03 December 2012

Sai Prasanna Kumar
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acha ok ok 

 

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Gunjan Tulsyan (Article)     03 December 2012

Gunjan Tulsyan
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Your Query has a simple answer:

1. Insurance A/c                                  Dr.   30000

    Prepaid Insurance A/c                   Dr.   30000

                      To Bank/ Cash A/c                              60000

and after passing this on 1st April,2013 pass a reversal entry as follows:

2. Insurance A/c                                    Dr.   30000

               To Prepaid Insurance A/c                          30000

Hope your doubt is clarified..!!

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Ramarao Gullipalli (Dy.Manager-Finance & Accounts)     04 December 2012

Ramarao Gullipalli
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Your Query has a simple answer:

1. Insurance A/c                                  Dr.   30000

    Prepaid Insurance A/c                   Dr.   30000

                      To Bank/ Cash A/c                              60000

and after passing this on 1st April,2013 pass a reversal entry as follows:

2. Insurance A/c                                    Dr.   30000

               To Prepaid Insurance A/c                          30000

Hope your doubt is clarified..!!

I agree with  Mr.Gunjan Tulsyan
 


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