A Running Tally of the Ledgers Used for the Profit and Loss Account

Ledger name Tally Head
Discount allowed Indirect Expenses
Donation & charity Indirect Expenses
Free sample Indirect Expenses
Insurance premium Indirect Expenses

What account is insurance?

Account Types

Account Type Debit
INSURANCE PAYABLE Liability Decrease
INTEREST INCOME Revenue Decrease

Which ledger comes under which group in Tally?

Register of Taxes Under the Duties and Taxes group, tax ledgers need to be created. These ledgers will contain all tax accounts, including VAT, CENVAT, Excise, Sales, and other trade taxes, as well as total liabilities.

What comes under direct expenses in Tally?

  1. In the event that you run a trading business, the following are the Direct Expenses. The acquisition of products for resale –
  2. The cost of freight associated with the acquisition of commodities. –
  3. Staff compensation for swapping jobs.
  4. – Payroll Savings Account
  5. Rent paid account for the godown or store
  6. Rent paid account
  7. Electricity for the warehouse and retail space – an Electricity Account
  8. Insurance for the godown and the shop, via the Insurance Account
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What type of account is insurance premium?

The account for the insurance premium is a personal one. A person’s use of an account to fulfill their own individual requirements is the definition of what is known as a personal account. It is a unique phrase that is used to differentiate them from all of the accounts that are maintained for the purposes of a company or a corporation.

Is health insurance an asset or liability?

This is frequently the case for several types of coverage, including health, life, hazard, automotive, liability, and others that are required by a company. When a commercial policyholder makes a payment toward the premium in advance, the entire amount is recorded as a current asset and is kept as an asset until the coverage is put to use.

Is insurance a expense?

What exactly is the cost of insurance? Insurance expense refers to the total amount of money spent on costs associated with purchasing an insurance policy. This cost is borne for each and every insurance policy, including those for car, home, and health coverage.

What are the examples of direct and indirect expenses?

Direct expenses include things like commissions, piece rate salaries, and manufacturing supplies. Other examples of direct costs are direct labor and direct materials. Expenses like as pay for production supervisors, the price of quality control, insurance, and depreciation are all examples of indirect costs.

What is account head in Tally?

A certain category of transactions will be filed away under a specific designation known as the account head. For instance, if there are so many people who incurred conveyance expenditures and so many times, then all of the transactions would be logged under the category that is known as the Conveyance Expenses A/c.

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What is direct expenses and indirect expenses?

Direct Expenses Indirect Expenses. Direct expenses are costs that arise directly from the production of a good or the performance of a service and are therefore considered to be immediate. The running of a firm naturally results in the accrual of some expenses known as indirect costs.

What is miscellaneous expenses in tally?

What Exactly Is Considered a Miscellaneous Expense? A general ledger account known as ″miscellaneous expenditure″ is one that could record a significant number of ″insignificant transactions.″ Because the amounts involved in these transactions are so insignificant, it would not be worthwhile to record them in a distinct account.

What are examples of indirect expenses?

The costs of accounting, auditing, and legal services are all examples of indirect charges, as are the costs of company permits, office expenses, rent, supervisor pay, telephone expense, and utility costs. It is possible but not required to apportion indirect costs.

What are examples of operating expenses?

Rent, employee wages and benefits, transportation costs, utility bills, insurance premiums, property taxes, maintenance and repair costs, office supplies, depreciation, and advertising are examples of typical running expenditures incurred by a firm.

How do you record insurance expense?

When the asset is counted as a cost, the appropriate journal entry is to deduct the insurance expenditure account from the total and credit the prepaid insurance account. Therefore, the amount that is considered an expenditure in a given accounting period is equivalent to only the portion of the prepaid insurance asset that is allocated to that period on a ratable basis.

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Is insurance an income?

In most cases, the proceeds from a life insurance policy that you get as a beneficiary due to the death of the insured person are not countable as part of your gross income, and you are not required to file a tax return for them. On the other hand, any interest that comes into your possession is taxable, and you are required to disclose it as such when filing your taxes.

Is insurance a current asset?

Prepaid insurance is included as current assets on insurance firms’ balance sheets since it is not used up over the policy’s duration. When the insurance protection really kicks in, the premium payments for it are moved from the asset side to the cost side of the ledger.