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what is the meaning of prepaid insurance and outstanding
salary? please explain with example.
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Answer Posted / dheeraj singh
Prepaid insurance means such insurance we have paid in
advance. example If we paid rs 2500/- in f.y. 2009-10 for
the peroid (01.03.10 to 01.03.11). Rs. 208 for one month
will exp & (2500-208=2292)prepaid insurance because it is
not related to f.y. 2009-10
outstanding salary :- we have recorded in books but payment
has yet to be made. ex :- March Salary, we have booked in
books but we will make payment in coming month. We will
pass the entry
Salary dr
Salary payable cr
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