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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Suitcase purchased under companys accounts, damaged during travelling by airlines. Amount reimbursed
Replies (7)
Quick Summary
If full amount is reimbursed then, same will be under Indirect Income, profit and loss Account.
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 .
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.
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.
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.
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.
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.
Agreed on above
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