insurance claim entry

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This query is : Resolved

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Insurance claim received for a car is treated as income and not added to asset value. Entry is debit bank and credit insurance claim income under indirect income.

sanjay

sanjay (Querist)

10 February 2011 Hello Experts
I am sanjay this side. I want valuable advise on one entry in Tally. There is a car in the co's book and the insurance claimed by the co and the cheque has been recieved. I want to know that this amount is treated as an income of the co or the value of car has to be increased.
the entry should be:
Bank A/c Dr
Insurance Claim A/c Cr and this account is under Indirect Income head while creating the account in tally.
Kindly advise.
thanks and regards
sanjay

CMA Nishad Patkar

CMA Nishad Patkar (Expert)

10 February 2011 Dear Sanjay,

Your entry is correct. You should create "Insurance Claim Received" A/c under Indirect Income as it is not directly related to business activity. Secondly it never increases the value of the Car in any way.

Regards

Nishad

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