Insurance claim received

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naynsi jaiswal

naynsi jaiswal (Querist)
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18 September 2015 what would be the entry of loss in transit and insurance claim received for the same?

Amol S Joglekar

Amol S Joglekar (Expert)
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18 September 2015 debit loss in transit
credit stock in trade
(For loss in transit)

debit bank account
credit loss in transit
(For insurance claim received)

naynsi jaiswal

naynsi jaiswal (Querist)
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19 September 2015 cant we pass this entry?

debit goods lost in transit
credit purchase
credit input
(for loss in transit)

naynsi jaiswal

naynsi jaiswal (Querist)
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19 September 2015 if that very goods is purchased for selling purpose (we sold it, if it would nt lost in transit and pay output tax to gov) so, cant we show that very amount as sales with output and will receive the entire amount from insurance company by passing the entry as

insurance claim DR
To sales (goods lost in transit)
To output

Amol S Joglekar

Amol S Joglekar (Expert)
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19 September 2015 it would be far from "true and correct"

Loosing goods in transit and getting insurance claim is NOT the activity of business.

Insurance claim is based on "cost or market whichever is lower". Crediting insurance claim to sales will HAMPER the Gross Profit ratio as well.

Your views please.

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