Question

Goods lost by fire Rs. 85,000. Insurance company admitted claim of 40%. Insurance company will be debited by ______ and entry will be recorded in ______.

Answer 1

Explanation:

given that goods are lost by worth 85000

the insurance gives a claim of 40%

therefore 40/100 * 85000= 34000

the journal entry is

Insurance claim a/c Dr 34000

To cash/bank a/c 34000

( being claim received for destroyed goods by fire)

the entry will be recorded in journal

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