Dr.Accumulated depreciation on truck Dr.Loss on Accident of truck Cr.Fixed Asset Cr.Scrap value of Truck sale . . Adjust loss on accident of truck to Insurance claim in year of accident . Dr.Insurance claim receivableA/c Cr.Loss on accident of truckA/c . . . As and when claim received . . Dr.BankA/c Cr.Insurance claim receivable
01 August 2024
To record the repair of the truck and the insurance claim payment, you need to account for the expenses and the receipt from the insurance company. Here’s how you can make the entries in your books:
### 1. **Recording the Repair Expenses**
When you incur repair expenses, you need to record the payment made to the repairer. Here’s the entry for paying the repair charges:
**Date: [Date of Payment]** ``` Repairs and Maintenance Expense A/C Dr. 40,000 To Cash/Bank A/C Cr. 40,000 (Being the payment for truck repair expenses) ```
### 2. **Recording the Insurance Claim Receipt**
When you receive the insurance claim payment, you need to record the amount received from the insurance company. Here’s the entry for the receipt:
**Date: [Date of Receipt]** ``` Bank A/C Dr. [Amount Received] To Insurance Claim Receivable A/C Cr. [Amount Received] (Being the receipt of insurance claim amount from insurance company) ```
### 3. **Adjusting for Insurance Claim**
If you had previously recorded the insurance claim amount as a receivable, you need to adjust it against the receivable account. Here’s the entry to adjust the claim:
**Date: [Date of Receipt]** ``` Insurance Claim Receivable A/C Dr. [Amount Received] To Insurance Claim Income A/C Cr. [Amount Received] (Being the adjustment of insurance claim receivable against the actual receipt) ```
### **Summary of Entries**
1. **Repair Expenses**: Record the cost of repairs when paid. 2. **Insurance Claim Receipt**: Record the receipt of the insurance claim. 3. **Adjustment**: Adjust the receivable if previously recorded.
### Example
Let's assume the insurance claim amount received is ₹30,000.
1. **Repair Expenses Entry**: ``` Repairs and Maintenance Expense A/C Dr. 40,000 To Bank A/C Cr. 40,000 ```
2. **Insurance Claim Receipt Entry**: ``` Bank A/C Dr. 30,000 To Insurance Claim Receivable A/C Cr. 30,000 ```
3. **Adjustment Entry (if receivable recorded previously)**: ``` Insurance Claim Receivable A/C Dr. 30,000 To Insurance Claim Income A/C Cr. 30,000 ```
If no receivable was recorded previously, you can simply record the receipt directly in the bank account and adjust your repair expenses accordingly.
Make sure to keep all documentation related to the repair and insurance claim for record-keeping and auditing purposes.
CAclubindia
