Journal entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 October 2013 journal entry for $6000 stolen from the safe of the firm will be:
cash embezzlement a/c dr.
to cash a/c

why not:
p&l a/c dr.
to cash embezzlement a/c

please explain!

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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06 October 2013 final result of the first entry will be your second entry. first entry just have track of loss. once the police inquiry formalities are completed, we need to take as abnormal loss to the extend of amount recoverd & insurance claim and debit the p&l a/c

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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06 October 2013 your both entries are correct,

1st you have to reduce the cash balance {as the cash have been stolen so the Cash reduced} that's the 1st entry,

then you have to write off it in P/L A/c. i.e 2nd Entry...

regards,

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Ganeshbabu K

Ganeshbabu K (Expert)
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07 October 2013 1)Credit should be given to Cash Account only because there is no cash,,it was stolen

2)Debit can be given to Profit and loss account

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