Premium paid on the joint life policy of partners is ___________________.

Credited to the respective partner's capital accounts

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Debited to the respective partner's capital accounts

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Credited to profit & loss account

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Debited to profit & loss account

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Solution

The correct option is D Debited to profit & loss account
A partnership firm may decide to take a joint life insurance policy on the lives of all partners. The firm pays the premium and the amount of policy is payable to the firm on the death of any partner or maturity of the policy, whichever is earlier. Such premium on insurance policy is debited to the profit and loss a/c of the firm.

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Similar questions

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