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why the loss by fire taking in to the credit side of the
trading a/c.instead of this is company's loss?
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Answer / shruti agarwal
Loss by fire is shown in the credit side of the trading
account to reduce the balance of goods purchased by the
cost price. Since it is a loss to the company the loss
figure is also debited to the profit and loss account. The
purpose of crediting it in the trading account is to reduce
the purchases, because such goods are neither sold nor they
are in the stock.
| Is This Answer Correct ? | 16 Yes | 3 No |
Answer / shrey
The Trading A/c is prepared to show the profit/loss from
trading activities. Goods lost by fire haven't been sold and
aren't in the closing stock either (obviously), but the
corresponding purchase amount has been debited. Therefore,
the cost of goods lost by fire is credited to show the
correct/accurate result from trading activities.
| Is This Answer Correct ? | 13 Yes | 1 No |
Answer / rupesh
Goods lost by fire is credit side because the reduce purchase of goods cost prise
Goods lost by fire havent been sold and not included in closing stock
The purchase cost is debited
| Is This Answer Correct ? | 1 Yes | 1 No |
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