Question

there was a fire in m ltd godown . it resulted into loss of rs 5 cr goods.however the insurance company accepted the claim of rs 4.5cr only.this will result_____ equity by rs ______ a)increase, 4.5 cr b)decrease , 0.5 cr c)increase , 0.5 cr d)decrease , 0.5 cr

Answer 1

 The answer is c option - decrease , 0.5

Answer 2

"The answer is c option - decrease, 0.5

This will result in a loss of 0.5 Cr to a company

When the fire brought about the loss worth Rs 5, the ltd first credited the stock and capital account by Rs 5, when the insurance company comes in and accepts the "claim by compensating" the "Godown LTD".

The "compensation worth 4.5", therefore the "stock insured" will be "debited by Rs 4.5" and the 0.5 loss experienced by the ltd co. will be credited, on the stock accounts."