Question

If the insurance premium paid 1,000 and prepaid insurance 300. The amount of insurance premium shown in Profit and Loss account will be _____.

• A. 1,300
• B. 1,000
• C. 300
• D. 700

Answer 1

The correct option is D 700

Because the prepaid amount is deducted from the concerned expenditure, at the time of showing it in the Profit and Loss account.
1000 - 300 = 700