Question

What is the journal entry for insurance paid by cheque?

Answer 1

Insurance Premium A/C   Dr   Rs.xxx

     To Bank A/C    Rs.xxx

(being insurance premium paid by cheque)

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 the expense of the company , therefore  its debited

Bank A/c - personal A/c , where banker as payer , he gives money to the insurance company , therefore its credited

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Journal entry

Insurance premium   A/c   Dr     

              To Bank A/c                      

(being insurance premium paid through cheque   )