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A quick Accounting question

  • 19-06-2010 2:33pm
    #1
    Vurnon San Benito
    Registered Users Posts: 3,979 ✭✭✭


    Hello there.
    The time is nigh and I'm just trying to get the last bit of study I can done.

    Anyway, my question is : for a Company Account, there's one note that I'm not sure on. It was on the mock and was about stock being destroyed by fire, with insurance covering it.

    Any ideas what's to be done in case of stock being destroyed with fire or insurance etc?

    Cheers,
    Dooceman.


Comments

  • #2
    Ashashi
    Registered Users Posts: 285 ✭✭Ashashi


    You take the stock damaged away from purchases, then if there is damage to the building, you take the labour away from wages, and the materials used away from purchases.

    If it says that the insurance are going to cover it, then you put in your current assets, "Insurance Claim Due"

    If it says they paid it, then you say wether there was a loss made or not on the insurance.

    E.G, if it does 20000 worth of damage, and the inusrance only covers 18000, there is a loss of 2000, that goes in admin expenses if I am correct.


  • #3
    sarahisdeadly
    Closed Accounts Posts: 36 ✭sarahisdeadly


    That same adjustment came up in 2007 if you want to look up the marking scheme!


  • #4
    Vurnon San Benito
    Registered Users Posts: 3,979 ✭✭✭Vurnon San Benito


    Sounds right.
    Thanks a mill!

    So say the insurance breaks even with the stock damaged and the labour costs, it goes in as a Current Asset or not in at all?


  • #5
    Ashashi
    Registered Users Posts: 285 ✭✭Ashashi


    If it breaks even, you could leave it out, or just put it in current assets and have a "-" beside it.


    Insurance claim due -

    etc.


  • #6
    Vurnon San Benito
    Registered Users Posts: 3,979 ✭✭✭Vurnon San Benito


    Cheers lads!
    Appreciate the help.

    I'll be a happy man if my company account works out tomorrow (providing it comes up)!

    Thanks again.!


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  • #7
    **Timbuk2**
    Moderators, Education Moderators, Motoring & Transport Moderators Posts: 7,395 Mod ✭✭✭✭**Timbuk2**


    If it breaks even, you do show the insurane in current assets but nothing in administration costs


  • #8
    UndertheMatt
    Closed Accounts Posts: 18 ✭UndertheMatt


    Doocey wrote: »

    I'll be a happy man if my company account works out tomorrow (providing it comes up)!

    Yeah, i keep thinking that the exam is tomorrow aswell..

    Just wanna get it over with. :D


  • #9
    Vurnon San Benito
    Registered Users Posts: 3,979 ✭✭✭Vurnon San Benito


    UndertheMatt wrote: »
    Yeah, i keep thinking that the exam is tomorrow aswell..

    Just wanna get it over with. :D

    Haha, Tells you how much study I've been doing :eek: :D

    One last thing lads.

    If a building and stock is destroyed, what's the story there?
    Same as just the stock being destroyed?

    Helpful stuff lads, and I'm sure you're answering other students questions too :)


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