What is the treatment of Insurance premium paid in the books of NPO ?
Dear Student,
Insurance premium is a revenue expenditure for the firm (it has to be paid every year). Therefore, it is shown in both, Receipts and Payments a/c ( credit side that is, Payments side) and in Income and Expenditure a/c (debit side that is Expenditure side).
If insurance premium is prepaid, it is also shown as an Asset in the Balance Sheet.
Regards
Insurance premium is a revenue expenditure for the firm (it has to be paid every year). Therefore, it is shown in both, Receipts and Payments a/c ( credit side that is, Payments side) and in Income and Expenditure a/c (debit side that is Expenditure side).
If insurance premium is prepaid, it is also shown as an Asset in the Balance Sheet.
Regards