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Suitcase purchased under companys accounts, damaged during travelling by airlines. Amount reimbursed

shilpa (service) (28 Points)

19 May 2023

Amount reimbursed by the airlines against damaged suitcase while travelling shall go under which head of accopunts in company's book of accounts. please help

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7 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14163 Points)
Replied 19 May 2023

If full amount is reimbursed then, same will be under Indirect Income, profit and loss Account.

NARENDRA (ACCOUNTS MANAGER) (1488 Points)
Replied 19 May 2023

First you will have to debit to airlines & credit to the suitcase ( whatever account you were booked for earlier ) & credit to airlines when they reimburse you .

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Yasaswi Gomes new (Finance ) (4474 Points)
Replied 19 May 2023

If someone wants theze things in auditing then

Dr. Airline expense 90

Dr. Airline insurance 10

Cr. Bank 100

When suitcase is damaged

Dr. Receivables 8

Cr. Reimbursement claims

When it finally happens

Dr. Bank 8

Cr. Receivablea 8

I dont know what happens to the 2 but everything tallies and so far so good.

prasad Nilugal ( GST Practitioner & Accounts ) (14163 Points)
Replied 19 May 2023

Airlines A/c Dr
To Suitcase reimbursement A/c Cr
( reimbursement receivable)

Bank A/c Dr
To Airlines. A/c Cr
( payment received)

Suite Case reimbursement A/c under Indirect Income, profit and loss account.

Yasaswi Gomes new (Finance ) (4474 Points)
Replied 19 May 2023

Ok you can do that as well. But deep accountants know the inuranse amount and have to recognise all components of expenditures. Not unless there is a tax consequence on insurance entry.

Yasaswi Gomes new (Finance ) (4474 Points)
Replied 19 May 2023

Now ppl might be wondering what is deep knowledge. 500 Insurance amount/ 50000 airfare= % insurance covered. But disclosures might mention a differe insurance rate because all overheads are absorbed. Its all bad in accounting. Cost constraints increase due to lack of info.