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Question

Goods lost by fire is debited to Goods A/c.

A
True
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B
False
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Solution

The correct option is B False
Goods lost by fire is a loss to the organization and to be debited to profit & loss account. Goods are moving out from the business. Hence, they need to be credited.
Accounting entry will be as under:

Profit & Loss A/c Dr.
To Goods A/c

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Statement of Profit and Loss
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