Question

Full claim accepted by insurance Company on the loss of goods by fire is credited to ____________ A/c.

• A. Trading A/c
• B. P/L A/c
• C. Insurance Company
• D. None

Answer 1

Answer: (B)

P/L A/c

Journal Entries to be passed when insurance claim is accepted by insurance company on loss of goods by fire :

Loss by fire A/c. Dr.
To trading A/c
(Being purchase account decreased)
Insurance claim A/c. Dr.
To loss by fire A/c
(Being ins. claim lodged and loss by fire account nulified)
Bank A/c. Dr.
P&L A/c Dr.
To insurance claim A/c
(Being claim settled)