Insurance claim received against material damage

Nirad Sahoo (student) (41 Points)

24 July 2020

I want to know if material is damaged and we received insurance claim against it, how to account in books? what will be journal entry?

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CA Mohammed Khalandar (Practicing Chartered Accountant) (203 Points)
Replied 24 July 2020

Dear Sir,

The journal entry shall be :

Cash / Bank A/c.............Dr ( Actual claim funds received )

Abnormal Loss A/c..........Dr (Bal Fig)

To Stock A/c ( Cost of the material damaged )

To Other income A/C (Bal Fig)

Thanks & Regards,

Mohammed Khalandar

Chartered Accountant

Email : iamkhalandar @ gmail.com

Phone : 7899157078

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