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As an expense and an asset
This approach tries to resolve the differences between the two methods by ensuring that we show an asset that may materialize or crystallize and at the same time we charge an expense in the profit and loss for the premium.A new account called life policy fund is normally set up to facilitate the process.Relevant entries are:
DR. Life policy asset account CR. Cash book DR. Profit and loss CR. Life policy fund account (With the premium paid for both of the two journal entries)At the end of the financial period, the life policy asset account and fund account are normally adjusted to reflect the surrender value. The asset and fund account must be equal but directly opposite and incase the surrender value is higher than the premiums (total) paid to date are:- DR. Life Policy asset account CR. Life Policy fund account (With the difference)When the insurance company pays the sum assured or surrendered value, then we: DR. Cash book CR. Life Policy asset accountThe life policy fund account should be closed off to the partner’s capital accounts according to their profit sharing ratio.
As of January 1, 2011, the partnership of Canton, Yulls, and Garr had the following account balances and percentages for the sharing of profits and losses: Cash 80,000 non cash
Received 10,000 contribution from bill london in exchange for common stock What 2 accounts are used
The December 31, 2005, balance sheet of Far Imports includes the following items: The bonds were issued on December 31, 2004, at 97, with Interest payable on June 30 and December 3
Journal Entries for Dissolutions The following journal entries are relevant for the purpose of recording all dissolutions: 1) DR. Revaluation account CR. Asset account
In our discussion so far, we have supposed that the compounding is done yearly, here let us see the case where compounding is complete more often. In such case the equation (1) is
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State the users of accounting information Environment has brought new challenges for managers and other users of accounting information. Their requirements have changed and bot
Can anyone here help me in this question ?? Kindly tell how can we solve it Mr. “A” starts a new business. Before to start the business operation, he has purchased vehicle Rs. 1,
Form No special form is normally required for the creation of a trust except that a declaration of trust respecting land or any interest therein must be manifested and proved b
Consider a hypothetical banking system in which banks produce only demand deposit accounts. The currency deposit ratio (c) is 30% and the customary cash reserve ratio (r) for deman
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