INSURANCE CLAIM

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jijojose (Accountant) 24 January 2021

Our company is in to foodstuff trading. We have taken rejection insurance for goods. In some cases customers reject goods due to lab test failure in their country. Insurance company would settle us the full value of the invoice.Later on we resell these goods on behalf of the insurance company and pay salvage value to the insurance company.Please comment if the following entries are right.

On sale	Customer Dr
	To sales

On rejection by customer	Sales return Dr
	To customer

Loss booking	Loss of goods Dr(expense)
	To sales return

Claim Approval	Insurance company Dr (Receivable)
	Insurance claim (Other income)

Claim receipt	Bank Dr
	To insurance company

Later on sell goods to another party and pay salvage value to Insurance company

On selling on behlf of Insurance co.	Purchase Account Dr
	To Insurance company

Salvage payt to Ins.Co.	Insurance company Dr
	To Bank
Thanking you in advance for expressing your views