Question

1)Goods Costs ` 12,000 were destroyed by fire and the insurance Company admitted a claim for rs.7,600. The Loss by fire is disclosed in statmnet of income & expenditure under ​

Answer 1

Explanation:

Goods worth Rs.10,000 was destroyed by fire and insurance company admitted the claim of 60%. The journal entry

Answer 2

LOSS BY FIRE IS DISCLOSED IN THE FOLLOWING WAY.

Explanation:

Loss due to Fire as it depicts is a loss and expenses for a business. The accounting treatment or disclosure of goods destroyed by fire and claim on insurance is as follows:

1) Profit and Loss A/c                  Dr.  4,400

   Insurance Claim A/c               Dr.   7,600

         TO Purchase A/c                                   12,000