An insurance claim of Rs. 300 was accepted in respect of stock of Rs. 500, which was destroyed by fire, Rs.200 not covered by insurance should be debited to ______________.

Stock account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Trading account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Profit and loss Account

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Bad debts accounts

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Profit and loss Account
Loss of stock by fire is a loss to the business and to be debited to the profit & loss account fully if it is not insured.

In the given situation, loss of stock is Rs.500 of which a claim of Rs.300 was accepted by the insurance company. Hence the actual loss to the business is only Rs.200 which should be debited to the profit & loss account.

Suggest Corrections

Similar questions

Q. Stock of Rs.4,000 is destroyed by fire, It was not insured, The accounting entry is ________________.

Sohan’s A/c is debited by Rs. 2,500 while it was to be debited by Rs. 3,500 and Mohan’s A/c is debited by Rs. 3,500 while the same was to be debited by Rs. 2,500. For this error, which of the following can be a rectifying entry?

Q. Goods costing Rs. 20,000 was destroyed by an accident, insurance claim was nil. The effect will be ____________________.

Goods worth Rs 3,00,000 were burnt by fire and claim of Rs
1,80,000 has been accepted by the insurance company. How it will be recorded in final accounts?

Manish A/c is credited by Rs. 4500 while Manish A/c was to be debited by the same amount. Which of the following is correct?

Join BYJU'S Learning Program