insurance claim entry

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)
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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)
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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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