Question

journal entry (paid insurance premium 500)

Answer 1

insurance Premium A/c. Dr
.. To
Cash A/c

Answer 2

3 golden rules

• debit the receiver , credit the giver

• debit what comes in , credit what goes out

• debit all the expenses and losses , credit all the incomes and gains

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reason for debit and credit

Insurance premium A/c - Nominal A/c , its expense to the company therefore its debited

Bank A/ - Real A/c, where cash goes out of the company , its credited

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Journal Entry

Insurance premium A/c Dr 500

To bank A/c 500

(being insurance premium paid)

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