Fantastic Loss By Theft Journal Entry

You would generally do it an expense account along with the relevant asset accounts.

Loss by theft journal entry. Loss by theft ac Dr. Debit - Abnormal Loss ac Abnormal loss stock is an asset whose value is degraded. Because the amount of your Stock decreased by the thief.

An entry must be made in the general journal at the time of loss to account for the shrinkage. Cash and purchase are reduced. Thus Motors Inc.

Entry when loss takes place. Any inventory pilferage will need to be accounted for in a similar manner to the normal inventory issues during the period. Theft of assets must be recorded on the accounting books in order to properly reflect the loss of the asset and the resulting cost of the loss.

This loss is abnormal loss in nature. Any costs resulting from theft such as door or lock repair can also be recorded as theft expense. Stolen inventory is the big loss of any organisation who does the business of physical products.

Inventory Loss Due to Damage Often a company accepts returns that are damaged goods. United India Ins co. So loss by theft will be debited because cash and goods were stolen by an employee which is a lossand cash and purchase will be credited because it has gone out from the business ie.

Thus there was a loss on the sale. Journal entry for Stolen goods will be Loss by Thief AC Dr To Stock AC. Debit Cost of goods sold Credit Inventory Debit Bank Insurance compensation receivable Credit Other income - Insurance compensation This may instead be set off against the loss on asset theft.