Goods destroyed by fire rs.2000 and insurance company claim rs 1250.
This is shown on adjustment,how is it posting on profit and loss account and balance sheet

Goods destroyed by fire rs.2000 and insurance company claim rs 1250. This is shown on adjustment,how..

Answer / kwaja

Loss due to fire accident a/c...............Dr. 2000
To Purchase a/c. 2000
P&l a/c............dr. 2000
To loss .. 2000
Insurance company a/c .......dr 1250
To P&L a/c. 1250
And current assets i.e. cash is increased by 1250 in balance sheet

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