Question

insured furniture of rs 10000 destroyed by fire

Answer 1

Answer:

First entry - Loss by fire Account Dr

to purchase or Trading account

Second Entry.

insurance claim a/c Dr

P&L account. Dr

To loss by fire Account.

Answer 2

In this question, we need to give journal entries for the insured furniture that was destroyed by fire worth rupees 10,000.

Loss by fire A/C DR 10,000

                    To Purchase A/C 10,000

( Being goods destroyed by fire)

As in this situation, there is no information given about that if the insurance company has given a claim or not that's why no entry is passed.

For example - If in the question it was given that 40% claim was given by insurance company then entry will be -

Loss by fire A/C DR 6,000

Insurance Claim A/C DR 4,000

                To Purchase A/C 10,000

( Being furniture destroyed by fire and claim given by the insurance company)

CORRECT QUESTION-

Insured furniture of rupees 10,000 was destroyed by fire. Pass necessary journal entry.

PROJECT ENTRY #SPJ3

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