Insurance claim entry

According to me the entry would be

Sales Return A/c Dr

To Debtor's A/c

(Entry passed for the return of goods to the customer)

and

Bank A/c Dr

Loss in transit a/c Dr.

To Goods destroyed in transit A/c

(Bank A/c to be debited with the amount received from the insurance co., and the normal loss should be divided among all the goods)

Correct me if I am wrong

1. this is rejection of goods rather than sale return.

sale is not complete as goods have not been accepted by the buyer.

2. instead of goods lost in transit we need to credit Purchase A/c to reduce stock.

shivani

Acc to me

1.If the entry for sale has already been made at the time of dispatch of the goods then it will be return of the goods sold.

2. If the goods includes VAT then we cannot reverse the purchase.