query in cash flow staaement

IPCC 771 views 7 replies

How do u treat insurance and pre paid insurance while preparing cash flow statement in operating activite?

In a problem(practise manual sum no 2 cs statement paduka sum no 3) pre paid insurance is shown in WC changes where as insurance is not adjusted at all y?

Replies (7)

Insurance debited to profit and loss Account No need to make any adjustment assuming it is incurred for operating activity.
(Closing Pre paid insurance premium less opening Pre paid insurance premium) ,if positive , then subtracted as Increase in Current assets. AND ,if negative , then added as decrease in Current assets.

thank u so much dude....

the purpose of insurance is to prevent our business from uncertainties....that means to carry out our business activities smoothly.....that is to say that the purpose is operative......hence no adjustment is regarded of insurance in CFS 

 

On the other hand prepaid insurance is our current asset and hence the adjustment of same is required in working capital changes.........if there is an increase in the amount of prepaid insurance from the opening balance then it is to be deducted and vice versa

thanks guys for ur answers i wud like to know de sources from where got these info?

source - class 12th study:)

Can anyone will plz suggest me  that when to take Interest on Debenture in cash flow statement ???

Originally posted by : ROHIT CHATURVEDI

the purpose of insurance is to prevent our business from uncertainties....that means to carry out our business activities smoothly.....that is to say that the purpose is operative......hence no adjustment is regarded of insurance in CFS 

 

On the other hand prepaid insurance is our current asset and hence the adjustment of same is required in working capital changes.........if there is an increase in the amount of prepaid insurance from the opening balance then it is to be deducted and vice versa


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
ARTICLESHIP 31 May 2026
Article Assistant

KPRS And Associates

New Delhi

CA Inter

View Details
Company
19 May 2026
Article, CA & Paid Assistant Positions

Aggarwal Sarawagi and Co

New Delhi

CA

View Details
Company
19 May 2026
Accountant

ca kunjan

Mumbai

CA Inter

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details