Insurance claim
harini saha (Student CMA) (90 Points)
25 May 2020
are insurance claim is revenue or capital item?
harini saha (Student CMA) (90 Points)
25 May 2020
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 25 May 2020
Insurance is a capital guarantee product plus, insurance contracts do not fall under the scope of revenue recognition standard, so, adding all together, it is a capital item.
harini saha
(Student CMA)
(90 Points)
Replied 25 May 2020
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 25 May 2020
Insurance a/c
To Cash a/c
(purchased insurance)
Loss of goods a/c 10,000₹
To Asset a/c 10,000₹
(goods lost in fire)
Cash a/c 8,000₹
To Insurance claim 10,000₹
(claimed full insurance, but received only 8,000₹)
cash received on insurance claim.
and
P&L a/c 2,000₹
To Loss a/c 2,000₹
(loss taken to income statement)
Here, I have used only final accounts entries. In reality, you have to account for different accounts: https://www.accounting-basics-for-students.com/what-is-the-journal-entry-for-an-insurance-claim1.H T M L
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 25 May 2020
Forgot to mention, Bank and Cash are interchangeable. What ever the mode of payment, everyone uses it.
Rohit Agarwal
(64 Points)
Replied 03 June 2020
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