Question

Good worth rs.5000were destroyed by fire and insurance company agreed to pay rs.4,000in full settlement of the claim

Answer 1

Answer:

Lost by fire A/C Dr 5000

To purchases A/C 5000

Insurance company A/C Dr 5000

To lost by fire A/C 5000

Cash A/C Dr 4000

P& L A/C Dr 1000

To insurance company A/C 5000

Explanation:

(Being goods lost by fire ; insurance claim lodged and only 4000 was received from insurance company)