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Insurance une...

Question

Insurance unexpired account is a __________.

A

Real account

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B

Personal account

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C

Nominal account

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D

None of these

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Solution

The correct option is B Personal account
Unexpired insurance is an another term which is used for prepaid insurance. Prepaid insurance is deducted from the insurance premium expenses account in profit & loss account and shown in balance sheet as current assets. These accounts are not in the name of a specific person but are represented as personal account.

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Q. Insurance unexpired accounts is a _____________.

Q. The following balances were extracted from the books of M/s Panchsheel Garments on March 31, 2017.

Account Title	Debit Amount (₹)	Account Title	Credit Amount (₹)
Opening stock	16,000	Sales	1,12,000
Purchases	67,600	Return outwards	3,200
Return Inwards	4,600	Discount	1,400
Carriage inwards	1,400	Bank overdraft	10,000
General expenses	2,400	Commission	1,800
Insurance	4,000	Creditors	16,000
Scooter expenses	200	Capital	50,000
Salary	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Buildings	65,000
Debtors	6,000
Wages	1,200

	1,94,400		1,94,400

Prepare the trading and profit and loss account for the year ended March 31, 2017 and a balance sheet as on that date.
(a) Unexpired insurance ₹ 1,000.
(b) Salary due but not paid ₹ 1,800.
(c) Wages outstanding ₹ 200.
(d) Interest on capital 5%.
(e) Scooter is depreciated @ 5%.
(f) Furniture is depreciated ₹ @ 10%.
(g) Closing stock was ₹ 15,000.

Q. In the case of marine insurance reserve for unexpired risk is _______.

The following balances were extracted from the books of M/s Panchsheel Garments on March 31, 2017.

Account Title	Debit Amount Rs	Account Title	Credit Amount Rs
Opening stock	16,000	Sales	1,12,000
Purchases	67,600	Return outwards	3,200
Return Inwards	4,600	Discount	1,400
Carriage inwards	1,400	Bank overdraft	10,000
General expenses	2,400	Commission	1,800
Insurance	4,000	Creditors	16,000
Scooter expenses	200	Capital	50,000
Salary	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Buildings	65,000
Debtors	6,000
Wages	1,200
	1,94,400		1,94,400

Prepare the trading and profit and loss account for the year ended March 31, 2017 and a balance sheet as on that date.

(a) Unexpired insurance Rs 1,000.

(b) Salary due but not paid Rs 1,800.

(c) Wages outstanding Rs 200.

(d) Interest on capital 5%.

(e) Scooter is depreciated @ 5%.

(f) Furniture is depreciated Rs @ 10%.

Q. A prepayment of insurance premium will appear in the Balance Sheet and in the Insurance Account respectively as.

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