[Example] Goods Destroyed By Fire Journal Entry

 Welcome back to our blog in today's post we are going to record a journal entry for goods destroyed by fire so if you are an accounting student then you can check out this post till the end.

• Example:

As you might have seen, if there is a fire in a company's warehouse, then that company covers the money through its insurance, and then a loss by fire journal entry fire is necessary.

Now let's start our post and see the goods lost by fire journal entry

Goods Destroyed By Fire Journal Entry

When goods are destroyed by fire, you must make a journal entry to account for the loss. Here's how you can do it:

Example 1: Suppose goods worth 10,000 were destroyed by fire. The journal entry would be:

Account	Debit (INR)	Credit (INR)
Loss by Fire	10,000
Inventory		10,000

In this table, you can see the financial impact of the goods destroyed by fire on your company's financial statements.

I hope you understand this entry.

insurance claim receivable journal entry

Now check the insurance claim receivable journal entry 

Account	Debit (INR)	Credit (INR)
Insurance Claim Receivable	10,000
Insurance Revenue		10,000

This given entry shows that the loss from the fire is expected to be covered by an insurance claim.

Conclusion

Here in this article, we add a goods destroyed by fire journal entry so if you are an accounting student then you should read this post till the end.