If the insurance paid was Rs 2,000 and pre-paid insurance already in R
| If the insurance paid was Rs 2,000 and pre-paid insurance already in Rs 500, then the amount of insurance premium shown in profit loss account will be:
A. Rs 2000
B. Rs 500
C. Rs 1500
D. Rs 2500
Right Answer is: C
SOLUTION
• Entry
Insurance a/c –Dr.
To prepaid Insurance a/c- Cr.
• Profit & Loss account
Dr. Cr.
• If the insurance paid was Rs 2,000 and pre-paid insurance already in Rs 500, then the amount of insurance premium shown in profit loss account will be Rs. 1500.
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If the insurance paid was Rs 2,000 and pre-paid insurance already in R