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Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry?
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Purchase goods for 20000 out of these goods amounting 14000 insured go...
Purchase of Goods
- The total purchase of goods is ₹20,000.
- Out of these goods, ₹14,000 are regular goods.
- Insured goods amount to ₹3,000.
Fire Incident and Loss
- A fire resulted in the burning of insured goods worth ₹3,000.
- The estimated loss from the fire is ₹2,500.
- The insurance company accepted the claim and made the payment.
Journal Entry
The journal entry to record the loss and insurance claim would be as follows:
- **Debit**: Loss from Fire (Profit and Loss Account) ₹2,500
- **Credit**: Insurance Claim Receivable ₹2,500
- **Debit**: Bank Account (or Cash Account) ₹2,500
- **Credit**: Insurance Claim Receivable ₹2,500
Explanation of the Journal Entry
- The first entry acknowledges the loss incurred due to the fire incident, which will impact the profit and loss account.
- The second entry records the receipt of the insurance claim, reflecting the inflow of cash or bank balance due to the accepted claim.
Final Summary
- The total loss from the fire is recorded as an expense.
- The insurance reimbursement effectively mitigates this loss, reflecting a cash inflow.
- Overall, the journal entries maintain accurate records of transactions and ensure proper financial reporting.
This structured approach ensures clarity and comprehensiveness in accounting for such incidents in financial records.
- The total purchase of goods is ₹20,000.
- Out of these goods, ₹14,000 are regular goods.
- Insured goods amount to ₹3,000.
Fire Incident and Loss
- A fire resulted in the burning of insured goods worth ₹3,000.
- The estimated loss from the fire is ₹2,500.
- The insurance company accepted the claim and made the payment.
Journal Entry
The journal entry to record the loss and insurance claim would be as follows:
- **Debit**: Loss from Fire (Profit and Loss Account) ₹2,500
- **Credit**: Insurance Claim Receivable ₹2,500
- **Debit**: Bank Account (or Cash Account) ₹2,500
- **Credit**: Insurance Claim Receivable ₹2,500
Explanation of the Journal Entry
- The first entry acknowledges the loss incurred due to the fire incident, which will impact the profit and loss account.
- The second entry records the receipt of the insurance claim, reflecting the inflow of cash or bank balance due to the accepted claim.
Final Summary
- The total loss from the fire is recorded as an expense.
- The insurance reimbursement effectively mitigates this loss, reflecting a cash inflow.
- Overall, the journal entries maintain accurate records of transactions and ensure proper financial reporting.
This structured approach ensures clarity and comprehensiveness in accounting for such incidents in financial records.
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Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry?
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Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry?.
Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchase goods for 20000 out of these goods amounting 14000 insured goods amounting to 3000 burnt by the fire out of this insured good but the loss is only 2500 insurance company accepted this claim and made the payment journey entry?.
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