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In case of some expense u might have seen advance payment is done. So as to comply with the terms of agreement or it can be

for any other reason too.

And this advance is shown in the asset side of balance sheet.

Now,in case of insurance the same thing is happening.

For example:- a ltd. F.y begins from 1-4-10 to 31-3-11. A ltd. Purchases a fixed asset on 1-2-11. Now a ltd. Wants to get this fixed asset insured and minimum insurance period as per the insurance policy is 1 year. So here the insurance period will

begin from 1-2-11 to 28-2-12.

As per accrual basis of accounting expenses which pretain to a particular year are are to be shown in the p/l of that year. And rest are shown as prepaid expense (in case of insurance termed as , unexpired insurance)

now coming back to a ltd. Let us suppose that payment made is = rs. 12000.

Calculation of expired and unexpired expense.

Total insurance expense paid = 12000

insurance expense of single = 12000/12


expired insurance = 1000*2 (for the month of feb and march 2011)

and rest of the amount is unexpired insurance because the period to which it pertains is of next f.y. Hence in the b/s of 10-11 insurance amount of rs 10000 will be shown as unexpired insurance.

And yes one thing more. There is no such term as unexpired prepaid insurance. Either u call it prepaid insurance or unexpired insurance.

Hope i solved ur query.

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โˆ™ 2011-07-05 04:58:17
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Q: How to calculate expired and unexpired prepaid insurance at the end of a year?
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Related questions

Is unexpired insurance an asset?

Yes. Unexpired insurance, or prepaid insurance, represents value to the business since it has utility and is owned by the business (the company has claim to the policy). Therefore by definition, unexpired insurance is an asset.

What is unexpired expense?

those expenses which have been paid in advance and whose benefit will be available in future are called unexpired or prepaid expenses. e.g. insurance premium

What will be the journal entry for unexpired rent?

debit unexpired rentcredit prepaid rent

What is the proper adjusting entry at April 30 the end of the fiscal year based on a prepaid insurance account balance before adjustment 16000 and unexpired amounts per analysis of policies 6000?

debit insurance expense 10000 credit prepaid insurance 10000

Can you get insurance on a prepaid phone?

Yes you can get insurance on prepaid phones.

Prepaid insurance is reported on the balance sheet as a?

Prepaid insurance is reported on the balance sheet as a

What is prepaid insurance?

insurance not yet paid

What is debited and credited in adjusting entry for prepaid insurance?

[Debit] Prepaid Insurance [Credit] Cash / bank

What is the journal entry for advance insurance premium paid in cash?

prepaid insurance a/c..........dr. To insurance a/c

List Prepaid expenses on balance sheet?

Prepaid Rent, Prepaid Insurance, and Prepaid Interest... maybe? Check it out on

What is the meaning of entries to apportion recorded cost?

Apportioning cost means dividing cost between Expired cost (depreciated value) and Unexpired cost (not depreciated yet). Cost which is used or whose time period is over is expired cost which can also be called as expense now, while unexpired cost can be named as remaining book value. For example, Prepaid rent was paid in September for the coming 4 months was $4000. Now, at the end of September the expired cost will be $1000 (and will be recorded in income statement as expense) and Unexpired cost will be $3000 (& will be recorded in Balance sheet as an asset ). Entry at the start of September would bePrepaid Rent a/c $4000 (Dr)Cash a/c $4000 (Cr) Entry at the end of September would be Rent a/c $1000 (Dr)Prepaid Rent a/c $1000 (Cr)See here, the used up cost or you may say asset has been turned into an expense, mitigating the value of Prepaid rent with $1000. Suppose you are preparing Balance Bheet at the end of September, the $1000 will be recorded in Income Statement as an expense while the Remaining $3000 will be recorded as current asset in Balance Sheet.

Is Prepaid insurance expense an asset?

Prepaid insurance premia is to be shown in the Profit & Loss Account, and not as an asset in the Balance Sheet.

Why there is decreasing in cash while increasing in prepaid expense?

Because a prepaid expense is a type of asset. Once you prepay insurance for example. You have an increase in this asset called "Prepaid Insurance", and thus a reduction in cash. Once the Prepaid Insurance is used up it decreases while the Insurance expense increases. This is called amortization.

How calculate freight prepaid by item?

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Maruhom Shop paid for its insurance last March 1, 2017 for 12 months, worth P120,000.00. The company recorded prepaid insurance and cash in bank in its Book of Accounts. How much is the expired insurance for March 31, 2017?

i mean itโ€™s probably worth like 125 a day cause if its 120,000.00 for 12 months it should be around 200 mabey even 300 a day

Is prepaid insurance an asset?


Is prepaid insurance a asset?


What type of account is Prepaid Insurance?

Prepaid insurance is personal nature of account and amount in it is shown as current asset in balance sheet.

Does prepaid insurance go on income statement?

Prepaid insurance go to balance sheet as it is paid in advance and current assets of business.

Distinguish between outstanding expenses and unexpired expenses?

Those expenses which have been paid in advance and whose benefit will be available in future are called unexpired or prepaid expenses. e.g. insurance premium The expenses remaining unpaid at the end of the accounting period are called outstanding expenses.Certainly expenses like salaries,rent etc. of the every month will be paid in the next months. By ADITYA (UPES)

What is the difference between prepaid insurance and insurance expense?

When payment for insurance is made advance of actual expenses then it is called prepaid insurance which is asset for business until insurance benefit is utilized while insurance expense is actual insurance expense when insurance benefit is taken.

Is prepaid insurance a current asset?

yes, it is

Is prepaid insurance a debit or credit?


Is prepaid insurance a debit or credit balance?

Prepaid insurance is that amount which is paid in advance and no benefit has taken yet that's why it is current asset for business.

Is insurance expense an asset or liability?

Prepaid insurance would be an asset. Insurance expense is when the insurance has been used up, thus making it an actual expense on the Income Statement. Whereas Prepaid Insurance on a Balance sheet is classified as an Asset.

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