Insurance Goods Journal Entry
By philip kahoro nairobi kenya q.
Insurance goods journal entry. The journal entry would be as follows. This is accomplished with a debit of 1 000 to insurance expense and a credit of 1 000 to prepaid insurance. Step 1 identify the acconts and their types. When the insurance proceeds become fixed and determinable you record the following journal entry to record the gain.
Company a paid 10 000 as insurance premium in the month of december the insurance premium belongs to the following calendar year hence it doesn t become due until january of the next year. Prepaid insurance is debited which indicates the creation of an asset in the balance sheet. Loss by fire a c dr. What is the entry for the claim recovered from stolen goods.
Follow the basic principles of accounting step by step for any entry. Insurance company s claim a c dr 8 000 loss by fire a c dr 2 000 to goods stock a c 10 000 being goods lost by fire and insurance company s claim. Journal entries in tally is not used for recording all kinds transactions generally transactions recorded through journal voucher in tally erp9 does not include cash or bank account however tally allow user to enter cash bank transactions through journal vouchers by activating this. Example journal entry for prepaid insurance.
The journal entries for the stolen goods and insurance claim. Answer tejeshwar khandelwal. Journal entry in tally erp9 is a different concept than what we have learned theoretically from our class rooms. In the case of claim receivable from insurance for stock stolen from a shop where would the credit be posted and under what group of accounts in tally.
There will always be 2 or more acconts in atransaction. I am giving a general rule whereby you can pass entry of any transaction. When the insurance proceeds arrive debit cash and credit accounts receivable. Journal entry when prepaid insurance is paid.
Goods worth 5000 destroyed by fire and insurance company admitted claim for 4000 only. Instead of debiting cash as we did in the previous scenario we debit accounts receivable.
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