Question

fire insurance premium came on profit and loss acc​

Answer 1

Answer:

Profit and Loss accounts is an account in a book of an organisation to ascertain net profit or loss for a particular period of time or net result of a business. All expenses/losses are recorded on the debit side and Income/gains are recorded on the credit side of Profit and Loss account.As drawings have effectively already been taxed by not including them as an expense in the Profit and Loss A/C they are not then taxed as a separate source of personal income. ... The profit of the Ltd company is then subject to corporation tax.

Answer 2

In this question, we are asked to tell if the fire insurance comes in a profit and loss account.

• Your income statement, not your balance sheet, will reflect the accounting treatment of your auto insurance and product liability insurance. Your income statement will mention insurance expenses as one of the spending categories.
• After the accounting period, an adjustment entry is made to reflect the adjustment. A correct insurance expense for the accounting period is reflected in the profit and loss account thanks to an adjustment entry.
• The debit side of the profit and loss account is used to record all expenses and losses, and the credit side is used to record all income and gains.
• Drawings are not taxed separately as a source of personal income since they have already been taxed in effect by not being included as an expense in the profit and loss account.

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