alleryGoods worth ₹8,000 destroyed by fire; ₹6,000 recovered from insurance. The loss debited to P&L:
A₹2,000 net unrecovered
B₹8,000 full loss
C₹6,000 part recovered
DZero (insurance covers all)
Answer & Solution
Correct answer: A. ₹2,000 net unrecovered
1. Loss by fire = ₹8,000; insurance recovery = ₹6,000.
2. Net loss to P&L = 8,000 − 6,000 = ₹2,000.
3. Goods destroyed are credited to Trading Account; loss debited to P&L; insurance claim shown as a receivable.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.4 abnormal losses_
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