What is the treatment of stock lost in fire--if Insured and if not insured for Fire Insurance?

In case goods are not insured the total loss should be shown on the credit side of the trading account. The same amount should be shown on the debit side of the profit and loss account. If goods are insured and insurance company admitted the claim, the total loss should be credited to the trading account, amount claim not admitted by the insurance company is debited to P&L account andclaim admitted is shown on the asset side of balance sheet

If it is not insured then loss due to fire should be recognized and debit to P&L Account but if it is100% insured then insurance claim will be debit instead of P&L Account

If not insured: a loss by a debit of the abnormal loss P&L account against a credit of the stock.

If insured, and since we have principles that oblige us to show in a clear way the financial operation then I suggest to book the initial entry to show that we had a loss in the stock (under the abnormal loss heading in the income statement) and then to book the received amount of the insurer (or the engagement to receive) in an expense transfer account (credit of the P&L account against bank or the insurer account). Like that the total effect on the income statement will be nil but we will show the two operations in separate headings.

Agreed with answers above

Its a Abnormal loss in both cases insured or not insured

Accounting Treatment

Regular EntriesNet Effect1) Abnormal Loss Stock a/c   Dr       To Trading a/c

2) Abnormal Loss Stock a/c   Dr       To Expenses Outstanding a/c

3) Insurance Company a/c   Dr       To Abnormal Loss Stock a/c

4) Proceeds Receivable a/c   Dr       To Abnormal Loss Stock a/c

5) Profit and Loss a/c   Dr       To Abnormal Loss Stock a/c

Insurance Company a/c   Dr Proceeds Receivable a/c   Dr Profit and Loss a/c   Dr     To Trading a/c     To Expenses Outstanding a/c

If stock is insured then either the insurance company shall admits100% of the claim or it will admit a part of it. Scenario I :100% Claim accepted then the total loss is credited to the Trading A/c and Insurance Claim A/c is debited. Scenario2: Partial claim is accepted then the total is credited to the Trading A/c and the Profit and Loss A/c will be debited with respect to the claim not accepted and Insurance Claim A/c shall be debited for the accepted part.

 

If stock is uninsured then the entire loss of stock is recognised in the Profit and Loss A/c.

Sorry I could not answer because I did not understand the question translation

I agree with everyone answer

Goods lost by fire a/c DR To Trading a/c If not insured: P & L a/c Dr To Goods loss by fire a/c If insured: P&L a/c Dr Insurance claim a/c Dr To Goods loss by fire When claim received: Cash a/c Dr To insurance claim Insurance shown on B/S