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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 : 3956]
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 : 2263]
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 : 2263]
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
@TCS


[ Scorecard : 15463]
Posted On 28 April 2010 at 04:11

THANKS




SHIRAS
Accountnat


[ Scorecard : 240]
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 : 2263]
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




Himanshu Lodha
Member


[ Scorecard : 23]
Posted On 09 June 2014 at 12:52

I think the accounting entry should be- 1. Goods lost by theft Dr To Purchase

2. Insurance Claim Dr To Goods lost by fire.

here ins claim recivable shall be come in current asset and purchase will be reduced.



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