Concepts

Question 1

How is insurance paid in advance $4200 GST exclusive applied

Answer 1

Transactions are recognized when they occur. Insurance paid in advance $4200 GST exclusive for Jet Boat Tours and are recorded and reported as a prepayment, a current asset increasing by $4200 in the Statement of Financial Position.In the Income statements, the administrative expense-Insurance will decrease by $4200. This is because the transaction relates to the next accounting period.