Question

(iii) Paid by cheque 8,400 as insurance premium for a period of 12 months starting
1st August 2016. Financial year closes on 31st March every year.
[Ans Total 232.2007​

Answer 1

Answer:

prepaid insurance = 8400×4/12=2800

insurance premium paid up to 31july 2017

but books closed on 31 march 2016 so time period from 1april to 31 july lies in next year for 4 months insurance premium is paid in advance