New Click here to enroll in UIICL SO Finance and Investment Course

    Register

    Question

    With respect to Insurance Accounting, what is the appropriate adjustment entry based on the provided information?

    A) Claims intimated and accepted but not paid account Dr.

    To Claims account Cr.

    To Claims intimated but not accepted and paid account Cr.

    B) Claims account Dr.

    To Claims intimated but not accepted and paid account Cr.

    To Claims intimated and accepted but not paid account Cr.

    C) Claims intimated but not accepted and paid account Dr.

    To Claims account Cr.

    To Claims intimated and accepted but not paid account Cr.

    D) Claims intimated and accepted but not paid account Dr.

    To Claims intimated but not accepted and paid account Cr.

    To Claims account Cr.

    A Option A Correct Answer Incorrect Answer
    B Option B Correct Answer Incorrect Answer
    C Option C Correct Answer Incorrect Answer
    D Option D Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Claims account Dr. To Claims intimated but not accepted and paid account Cr. To Claims intimated and accepted but not paid account Cr. Explanation: The appropriate adjustment entry, as per option B), is to debit the "Claims account," credit the "Claims intimated but not accepted and paid account," and credit the "Claims intimated and accepted but not paid account." This reflects the movement of amounts from the "Claims account" to the two specified accounts. This approach ensures accurate accounting for claims that have been intimated and accepted but not yet paid, as well as claims that have been intimated but not accepted and paid.

    Practice Next

    Relevant for Exams: