Practice mode Accounting

Stock worth ₹800 is destroyed by fire and the insurer accepts a claim of ₹600. What adjustment is required?

Correct answer D. Credit Trading Account ₹800; debit Insurance Company ₹600 and Profit and Loss Account ₹200

Explanation

The lost stock is removed by crediting the Trading Account ₹800. The insurer becomes a debtor for ₹600 and the uninsured ₹200 loss is charged to the Profit and Loss Account.

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Stock worth ₹800 is destroyed by fire and the insurer accepts a claim of ₹600. What adjustment is required?

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Stock worth ₹800 is destroyed by fire and the insurer accepts a claim of ₹600. What adjustment is required?

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