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Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction?
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Purchase goods for 20000.A insurance policy was taken for goods amount...
Journal Entry for Purchase of Goods and Insurance Claim
Purchase of Goods:
Debit: Purchases Account (₹20000)
Credit: Cash/Bank Account (₹20000)
Taking Insurance Policy:
Debit: Insurance Premium Account (₹14000)
Credit: Cash/Bank Account (₹14000)
Loss of Goods:
Debit: Loss by Fire Account (₹3000)
Credit: Purchases Account (₹3000)
Insurance Claim Received:
Debit: Cash/Bank Account (₹2500)
Credit: Insurance Claim Received Account (₹2500)
Explanation:
- The first transaction is the purchase of goods, where the Purchases Account is debited and the Cash/Bank Account is credited. This means that the company has purchased goods worth ₹20000 and paid for it in cash/bank.
- The second transaction is the taking of an insurance policy for the goods. Here, the Insurance Premium Account is debited and the Cash/Bank Account is credited. This means that the company has paid an insurance premium of ₹14000 to insure the goods.
- The third transaction is the loss of goods due to fire. The Loss by Fire Account is debited and the Purchases Account is credited. This means that the company has suffered a loss of goods worth ₹3000 due to fire.
- The fourth transaction is the receipt of an insurance claim for the loss of goods. The Cash/Bank Account is debited and the Insurance Claim Received Account is credited. This means that the company has received an insurance claim amounting to ₹2500 for the loss of goods.
In summary, these journal entries show the company's financial transactions related to the purchase of goods, taking of insurance policy, loss of goods due to fire, and receipt of insurance claim.
Purchase of Goods:
Debit: Purchases Account (₹20000)
Credit: Cash/Bank Account (₹20000)
Taking Insurance Policy:
Debit: Insurance Premium Account (₹14000)
Credit: Cash/Bank Account (₹14000)
Loss of Goods:
Debit: Loss by Fire Account (₹3000)
Credit: Purchases Account (₹3000)
Insurance Claim Received:
Debit: Cash/Bank Account (₹2500)
Credit: Insurance Claim Received Account (₹2500)
Explanation:
- The first transaction is the purchase of goods, where the Purchases Account is debited and the Cash/Bank Account is credited. This means that the company has purchased goods worth ₹20000 and paid for it in cash/bank.
- The second transaction is the taking of an insurance policy for the goods. Here, the Insurance Premium Account is debited and the Cash/Bank Account is credited. This means that the company has paid an insurance premium of ₹14000 to insure the goods.
- The third transaction is the loss of goods due to fire. The Loss by Fire Account is debited and the Purchases Account is credited. This means that the company has suffered a loss of goods worth ₹3000 due to fire.
- The fourth transaction is the receipt of an insurance claim for the loss of goods. The Cash/Bank Account is debited and the Insurance Claim Received Account is credited. This means that the company has received an insurance claim amounting to ₹2500 for the loss of goods.
In summary, these journal entries show the company's financial transactions related to the purchase of goods, taking of insurance policy, loss of goods due to fire, and receipt of insurance claim.
Community Answer
Purchase goods for 20000.A insurance policy was taken for goods amount...
Purchases a/c Dr 20000
To cash a/c20000
(being goods purchased )
Insurance premium a/c Dr 14000
To cash a/c 14000
(being insurance premium taken on goods)
loss by fire a/c. Dr 3000
To purchases a/c. 3000
(being loss due to fire)
cash a/c Dr 2500
To insurance claim 2500
(being some amount of loss compensated by insurance)
(hope my answer would be satisfying ND correct , NICE QUESTION )
To cash a/c20000
(being goods purchased )
Insurance premium a/c Dr 14000
To cash a/c 14000
(being insurance premium taken on goods)
loss by fire a/c. Dr 3000
To purchases a/c. 3000
(being loss due to fire)
cash a/c Dr 2500
To insurance claim 2500
(being some amount of loss compensated by insurance)
(hope my answer would be satisfying ND correct , NICE QUESTION )
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Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction?
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Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction?.
Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchase goods for 20000.A insurance policy was taken for goods amounting 14000. Goods amounting to 3000 was lost by fire and a insurance claim for ₹2500 was received by insurance company. what will be journal for above transaction?.
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