What are the accounting journal entries to record inventory theft?

Answer 1

It should be
Loss due to theft of stock A/c Dr
To Trading A/c

Alternately if it can be related to specific purcases made in the same period

Loss due to theft of stock A/c Dr
To Purchase A/c

Since thefts reduce profits , the Loss due to theft of stock A/c shall be later carried as a Dr. to P/s A/c.

IN case of Insurance and claims made the entries will be different. LOss shall not be booked now but the amount shall be shown as outstanding from the Insurance Co.

Kanhayalal Sharma,
Cuttack
maruvihag@gmail.com

Answer 2

There are two below-mentioned treatments for recording embezzlement of cash by an employee.

(i) When Cash Embezzled is considered as 'Loss' by the firm.

In this case Journal entry is

Loss by Theft of Cash A/c

Dr.

Or

Cash Embezzlement A/c

Dr.

To Cash A/c

(Loss of cash by embezzlement)

(ii) When Cash Embezzled is not considered as Loss

In this case, the employee is held responsible for the amount of cash embezzled. The firm recovers the amount embezzled from the concerned employee. In this case, Journal entry is:

Employee's Personal A/c

Dr.

To Cash A/c(Cash embezzled recovered from the employee )

Answer 3

debit loss by theft
credit purchases

Answer 4

expense?