What is the accounting treatment of loss of stock by theft if insurance compensation is received after balance sheet date but before approval of final accounts?
Thanks and Regards
(Ekta)
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Urgent query
Replies (6)
(1)Debit cost of goods sold
credit inventory
(2) Debit Insurance compensation receivable
credit other income - insurance compensation
Thank u sir
one more ques..claim was lodged for full amount before balance sheet date but only part of compensation is received then what will be accounting treatment..
Book the amount receivable to the tune of actual amount received. - It is Conservation. Provide for all possible losses.
Conservatism * correction in previous msg.
| Originally posted by : Rama chary | ||
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(1)Debit cost of goods sold credit inventory (2) Debit Insurance compensation receivable credit other income - insurance compensation |
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Agreed
Ensure provision of AS-4
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