[ashishpandey]

Hello,
I would like to ask that in accounting language what does the term unxpired insurance signify, if it is giving in trial balance.
while preparing the final account an adjustment entry of insurance has been given which is as under,
1. during the year goods of the value of Rs. 800 destroyed by fire & insurance company admits a claim of Rs . 600 only.
now my question is what is the adjustment entry of above transaction in trading A/c, in Profit & loss A/c & In Balance sheet, if Rs. 600/- insurance is also given in trial balance,
& what is the net effect of such transaction in all the above A/c.

[kittukats]

I expect that as it is 600 is already given in TB it is already in the purchases. So no need to show it in the P&L a/c where as there is a loss of goods worth of 800 to us.So show it in the Credit side of Trading a/c. Where as we are gaining 600 so it is to be show on assets side of B/S under the head of Miscellaneous Expenses.

[pready]

Unexpired insurance is insurance you have paid for in advance, but have not used yet. For example you purchase auto insurance for 6 months on Jan 1 and at Mar 31 you will have 3 months of unexpired insurance left because you have used the insurance for 3 out of the 6 months (Jan, Feb, March). Your unexpired insurance is for the months of April, May, and June.