[Montserrat]

What is accreued insurance?

[ROLCAM]

Insurance premiums are sometimes paid
Annually.
If you know what the annual premium is
And at Balance Date you still have not paid
It, you must calculate the portion that
You should have paid for the period of the commencement of the policy and the
Date of closure of your accounts.
This accued amount should be charged to the profit anf loss account.
The Journal Entry is :-

DEBIT Insurance Expense $ XXX.XX
CREDIT Accrued Amount Payable $ XXX.XX

Being the amount of insurance for the
Period that has expired to balance date.