Question

why is goods lost by fire valued at cost​

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.

Explanation:

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Answer 2

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.