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General Accounting Discussions: Refund to PrePaid Insurance

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  1.  
    • CommentAuthorsloach
    • CommentTimeJan 27th 2010
     
    Received a refund from the Insurance Company.

    Db Cash
    Cr PrePaid Ins Accrual

    Db PrePaid Ins Accrual
    Cr Prepaid Ins Expense

    This isn't right! Need to reduce Insurance Expense, Increase Cash, reduce Accrual & ????

    Thanks.
  2.  
    Yes its right to reduce the insurance expense and increase cash but it depends on the situation.
    Thankful People: sloach
    • CommentAuthorsloach
    • CommentTimeJan 28th 2010
     
    Can you elaborate?
    • CommentAuthorpk
    • CommentTimeFeb 3rd 2010
     
    If you receiva a refund after having fully amortized the prepaid insurance cost, then :

    Dr. Cash
    Cr. Insurance Expense

    If you receiva a refund for the unamortized period, then:

    Dr. cash
    Cr. Prepaid Insurance

    savin.yakeep@yahoo.com
    Thankful People: sloach

1 to 4 of 4

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