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Discussion > Accounts > A/c entries >

loss on theft

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finance manager

[ Scorecard : 24]
Posted On 21 April 2010 at 14:15 Report Abuse

goods loss on theft from shop but has insurance claims not settled during the financial year , what are the accounting entries to be passed and how to show it in profit & loss , balance sheet. also will it effect VAT computation.


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Amir
Learner

[ Scorecard : 3951]
Posted On 21 April 2010 at 14:29

Dear Sir,

For VAT treatment u have to refer the relevant VAT Act & rules made thereunder.

Loss on account of Theft is an "Extra-ordinary item" in terms of AS-5 -

Extraordinary items should be disclosed in the statement of profit

and loss as a part of net profit or loss for the period. The nature and the

amount of each extraordinary item should be separately disclosed in the

statement of profit and loss in a manner that its impact on current profit

or loss can be perceived.

Eg -

 Profit from Ordinary Activities -  xxxx

Less: -Loss on account of Theft -  xxx

Profit before Taxes                    -  xxxx

(Next year the amount of Insurance claim received will be added in a same manner) 



Total thanks : 1 times




CA Sanjay Jha
ACCOUNTS MANAGER

[ Scorecard : 908]
Posted On 21 April 2010 at 14:48

Mr. Tripathi G

Firstly u have to book Loss on theft of goods.

Now when u claim insurance, what u expect that insurance claim received or not, if received then how much ?

As per AS 9 if u fulfil all formalities and certify  that insurance claim definetely received approxiamate 10,000/- then u have to book as income from insurance claim received.

When u have not certify then u have to better way book when actualy received.

For VAT computation is not effect in both cases because VAT not applicable on Insurance claim.



Total thanks : 1 times



shakuntala chhangani
FCA Course co-ordinator WIRC coaching centre

[ Scorecard : 2141]
Posted On 26 April 2010 at 02:29

You need to pass two entries in this case :

1. remove cost of goods lost from trading A/c so as to arrive at normal GP

     Goods lost by fire A/c Dr.    XX

         To Trading / Purchase A/c    XX

2. Pass the entry for insurance claim receivable and balance loss

    Insurance claim receivable A/c Dr.      XX

    Loss by fire A/c Dr.                                  XX

      To Goods lost by fire A/c                              XX

At the end of the year, loss by fire will appear into P/L A/c as extraordinary item and insurance claim, not yet received, will be shown on the asset side of the balance sheet

Regards, CA Shakuntala Chhangani



Total thanks : 2 times



shakuntala chhangani
FCA Course co-ordinator WIRC coaching centre

[ Scorecard : 2141]
Posted On 28 April 2010 at 02:06

friends, pl. read the above entries as loss by theft instead of loss by fire.




Santhosh Poojary
Final

[ Scorecard : 13239]
Posted On 28 April 2010 at 04:11

THANKS




SHIRAS
Accountnat

[ Scorecard : 216]
Posted On 17 October 2011 at 12:36

If we pass entry in Tally What is the Head of account for Goods lost by fire A/c Dr?

Loss by fire A/c Dr. -   is Indirect expense. But Goods lost by fire A/c Dr is what is the Head ogf a/c in Tally?

Thanks




Phalgun
CA FINAL(May 2014) ARTICLED STUDENT

[ Scorecard : 327]
Posted On 17 October 2011 at 14:41

Goods lost by fire under the head purchases




shakuntala chhangani
FCA Course co-ordinator WIRC coaching centre

[ Scorecard : 2141]
Posted On 19 October 2011 at 14:45

It will be an indirect expenditure. direct expenses are those which relate to producing the goods.

Regards, CA Shakuntala Chhangani



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