Question

goods lost by fire costing 10000 market value 12000 will be crediated to

Answer 1

Answer:

lt is lost of the tree and in the order of t and in cave and bike to the office and will have

Answer 2

ANSWER :

★ Purchase A/C

• ✎ Goods lost by fire costing Rs. 10000 (market value Rs. 12000) will be credited to Purchase A/C.

• ✎ In this transaction, the two aspects are :- Loss by Fire A/C and Purchases A/C.

• ✎ According to Modern Approach or American Approach of classification of accounts, Loss by Fire A/C is an Expenses Account and Purchases A/C is also an Expenses Account.

• ✎ As per the rules of debit and credit, when there is an increase in the expenses, it is debited. As there is an increase in expenses or loss when goods destroyed by fire; the Loss by Fire A/C will be debited. Again, when there is a decrease in the expenses, it is credited. As there is a decrease in Purchases when goods destroyed by fire; the Purchases A/C will be credited.