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Question
A prepayment of insurance premium will appear in ______.
Options
The trading account on the debit side
The profit and loss account on the credit side
The balance sheet on the assets side
The balance sheet on the liabilities side
Solution
A prepayment of insurance premium will appear in the balance sheet on the assets side.
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RELATED QUESTIONS
From the following Trial Balance of M/s Sanjay and Keshav, you are required to prepare Trading and Profit and Loss account, for the year ended 31st March 2013 and Balance Sheet as on that date after taking into account the following additional information:
| Trial Balance as on 31st March 2013 | |||
| Debit Balances | Amount (Rs.) | Credit Balances | Amount (Rs.) |
| Opening stock | 1,80,000 | Sales | 5,25,000 |
| Bills receivable | 80,000 | Rent | 22,000 |
| Purchase | 2,40,000 | Bills payable | 78,000 |
| Bad debts | 20,000 | Sundry creditors | 1,00,000 |
| Salary and wages | 24,000 | Capital account: | |
| Discount | 9,000 | Sanjay | 5,00,000 |
| Carriage inward | 12,000 | Keshav | 3,00,000 |
| Travelling expenses | 13,000 | ||
| Cash in hand | 38,000 | ||
| Furniture | 2,80,000 | ||
| Insurance | 12,000 | ||
| Land and building | 4,00,000 | ||
| Postage and telegram | 7,000 | ||
| Sundry debtors | 2,10,000 | ||
| 15,25,000 | 15,25,000 | ||
Additional information:
- Insurance paid in advance Rs. 3,000.
- Depreciation provided on furniture at 10%.
- Salary and wages outstanding Rs. 6,000.
- Rent received in advance Rs. 5,000.
- Closing stock as on 31.03.2013 Rs. 2,00,000.
Trial Balance as on 31.03.2013
|
Particulars
|
Debit
Amount (Rs.)
|
Credit
Amount (Rs.)
|
|
Capital Accounts
|
||
|
Apeksha
|
60000
|
|
|
Pratiksha
|
35000
|
|
|
Purchases and Sales
|
46700
|
85000
|
|
Sundry Debtors and Creditors
|
28000
|
25000
|
|
Bills Receivable and Bills Payable.
|
9600
|
7800
|
|
Opening Stock
|
18000
|
|
|
Wages
|
9900
|
|
|
Investment
|
13500
|
|
|
Postage and Telegrams
|
3600
|
|
|
Insurance
|
1200
|
|
|
Plant and machinery
|
40700
|
|
|
Furniture
|
18000
|
|
|
Cash in hand
|
2500
|
|
|
Carriage
|
3200
|
|
|
Bad debts
|
400
|
|
|
Prepaid rent
|
7000
|
|
|
Salaries
|
10500
|
|
|
212800
|
212800
|
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