"Insurance Charges ........Dr RS. 4004
To Bank A/c. ........... Cr RS. 4004" dated 14.03.2011 (Insurance charges paid for the period from 02.04.2011 - 01.04.2012)
How do i pass entry for "Prepaid Expenses" for F. Y. 2010-2011 for above details?
Umesh T. Kuchan (Accountant ) (41 Points)
06 August 2011"Insurance Charges ........Dr RS. 4004
To Bank A/c. ........... Cr RS. 4004" dated 14.03.2011 (Insurance charges paid for the period from 02.04.2011 - 01.04.2012)
How do i pass entry for "Prepaid Expenses" for F. Y. 2010-2011 for above details?
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 06 August 2011
Insurance charges paid on 14.03.2011 should be reflate at current asset as prepaid expenses and not at profit & loss a/c, after 31.03.11 it should be expense out.
Shubham Singhal
(.)
(130 Points)
Replied 06 August 2011
As u are saying that the amount paid by you pertains for the current financial year, so you have to pass the journal entry as Prepaid Insurance charges a/c Dr.
To Cash/Bank a/c
Doing this prepaid insurance charges will be shown under the head Loans and advances in Asset side.and on 01.04.2011 this will be reversed as Insurance charges a/c Dr.
To Prepaid Insurance charges a/c
so that the amount paid by you can be accounted in expense as it is for current year.
CA Rohit Maurya
(Associate)
(213 Points)
Replied 06 August 2011
Just delet the entry and pass entry likewise:
prepaid expenses a/c dr and bank/cash credit Or
just credit the insurance a/c and debit the prepaid expense a/c
both way possible freind..........good luck
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