Question

Q-5:- Goods destroyed by fire
will be debited by
a)Fire Insurance A/C
b) Purchases A/C
c) Loss by Theft A/C
d) Loss by Fire A/C​

Answer 1

Answer:

The goods destroyed by fire is considered to be loss for the business and is classified as a nominal account. Therefore, according to the rule of nominal account, all the expenses and losses are to be debited. Hence, "Loss by fire A/c" is debited when goods are destroyed by fire and "purchases A/c" is credited