The Logan Company does not carry fire insurance for any of its factories.Instead, the company appropriates retained earnings each year for an amount equal to the estimated annual insurance premiums.During the current year, one of its factories is destroyed by fire.Logan should debit which one of the following accounts to record the destruction

Question

Quizplus · Accepted Answer

Since the company does not carry fire insurance, there would be no liability account for fire loss. The loss due to fire account is used to record any losses due to fire, including the loss of the destroyed factory. This account should be debited to record the destruction.

The Logan Company Does Not Carry Fire Insurance for Any