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Bonus in redu...

Question

Bonus in reduction of premium appears in the revenue A/c as _________.

A

An income

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B

An expense

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C

No where

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D

Profit

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Solution

The correct option is A An expense
Bonus in reduction of premium is bonus which is not payable in cash but which is utilised by the policyholder to adjust premium due from him. If it is given in trial balance then it will be shown in the debit side of revenue account as expenses.

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