Question

.journal entry...paid life insurance premium of mr.mohan.......

Answer 1

Given " .journal entry...paid life insurance premium of mr.mohan......."

This transaction affects two accounts... Life insurance premium account (premium is paid)... Cash account (premium is paid)


Life insurance premium account is a nominal account.m( all expenses incomes gains losses come under nominal account...here life insurance premium is an expense to us)

Cash account is a real account.(all assets and Liabilities come under it..here cash is an asset)


The Three golden rules of accounting are..

Personal account - Debit the receiver, credit the giver

Nominal account - Debit All expenses and losses, credit All incomes and gains

Real account - Debit what comes in, credit what goes out

premium being an expense should be debited...Cash is Going out..it Should be credited...

so the Journal Entry will be.

Life insurance premium a/c Dr xxxx

To Cash a/c xxxx

(Being life insurance premium paid)


[Note: Mohan a/c should not be credited.. because its a cash transaction]

Answer 2

Answer:

Life insurance premium a/c Dr xxxx

           To Cash a/c xxxx

Explanation:

Mohan will debit his bank account while the debtor will credit his bank account. 2. the bank account will be credited while the capital account will be debited.

Given " .journal entry...paid life insurance premium of Mr Mohan......."

This transaction affects two accounts... Life insurance premium account (premium is paid)... Cash account (premium is paid)

A life insurance premium account is a nominal account.m( all expenses, incomes gains losses come under a nominal account...here, life insurance premium is an expense to us)

A cash account is a real account.(all assets and Liabilities come under it..here, cash is an asset)

These are the top three accounting principles.

1. Personal account - Debit the receiver, credit the giver

2. Nominal account - Debit All expenses and losses, credit All incomes and gains

3. Real account - Debit what comes in, credit what goes out

Premium being an expense, should be debited...Cash is Going out..it Should be credited...

So the Journal Entry will be.

Life insurance premium a/c Dr xxxx

To Cash a/c xxxx

(Being life insurance premium paid)

[Note: Mohan a/c should not be credited.. because its a cash transaction]

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