Insurance Claims One Shot | Loss of Stock + Loss of Profit | 7-Step + All Sums | CMA Inter Group 1

Insurance Claims (Fire Insurance Claims) One Shot Revision for CMA Inter Group 1 — Paper 6 Financial Accounting. This video covers BOTH parts of the chapter from scratch — Loss of Stock Policy and Loss of Profit (Consequential Loss) Policy — including the Memorandum Trading Account, Average Clause, abnormal goods, price-level changes, and the full 7-step method for Loss of Profit, with four fully solved important questions so you can revise the entire chapter in one sitting. 📚 What you'll learn in this One Shot: ✔ Loss of Stock Policy — why we insure stock and how a claim is calculated ✔ Memorandum Trading Account — why it is "memorandum" and how closing stock on the date of fire is found ✔ Actual Loss vs Net Claim — stock salvaged and the policy value comparison ✔ Average Clause — applicable, not applicable, and when the question is silent ✔ Underinsured vs fully covered — Net Claim = Actual Loss × Policy Value ÷ Closing Stock at date of fire ✔ How to find the GP Ratio when it is not given — using last year's trading account ✔ GP trend adjustment, and simple vs weighted average of multiple years' GP ratios ✔ "You are the surveyor, not the accountant" — physical movement of goods vs accounting entries ✔ Converting stock valued below or above cost back to cost ✔ Correcting errors — machinery, installation wages, goods taken by proprietor, goods given as samples ✔ Goods with customer on approval and goods with consignee ✔ Goods of abnormal type — Normal / Abnormal / Total column method ✔ Price-level changes (inflation) — converting current-year figures to last year's price level ✔ Loss of Profit Policy — Affected Period, Actual Sales, Standard Sales, Annual Turnover ✔ The 7 steps: Short Sales → Adjusted IGPR → Loss of Profit → Allowable Additional Expense → Actual Loss → Insurable Value → Net Claim ✔ Four fully solved practical questions ✔ Exam tips for step marking and presentation 👨‍🏫 Taught by: Abhimanyyu Agarrwal 📖 Course: CMA Intermediate Group 1 📄 Paper: Paper 6 – Financial Accounting 🙋 Frequently Asked Questions: Q1. What is a Memorandum Trading Account in insurance claims? A. It is a trading account prepared from the beginning of the year up to the date of fire, where the balancing figure is the closing stock on the date of fire rather than gross profit, which is why it is called a "memorandum" trading account. Q2. What is the Average Clause and how is Net Claim calculated? A. The Average Clause applies when the policy value is less than the closing stock on the date of fire (the stock is underinsured). Net Claim = Actual Loss × Policy Value ÷ Closing Stock on the date of fire. If the question is silent, assume the Average Clause is applicable. Q3. What is the Net Claim if the policy value is higher than the closing stock at the date of fire? A. The stock is fully covered, so the Actual Loss itself becomes the Net Claim. The same applies if the policy value is not given. Q4. How do you find the GP ratio when it is not given? A. Prepare last year's Trading Account from the data provided, calculate GP ÷ Sales × 100, and adjust it for any stated trend. If no trend is given, assume last year's GP ratio for the current period. Q5. Why must we think like a surveyor and not an accountant in this chapter? A. The insurance claim depends on the stock that was physically present in the godown on the date of fire, so goods physically received count as purchases and goods not physically dispatched are not treated as sales, regardless of invoices or accounting entries. ⏱ Timestamps: 0:00 Introduction 1:35 Loss of Stock — Memorandum Trading Account 5:20 Average Clause & Net Claim Formula 6:49 GP Ratio When Not Given 10:01 Surveyor Mindset & Cost Conversion 14:08 Goods with Customer / Consignee 16:18 Sum 1: Aman Ltd — Full Solution 29:52 Abnormal Goods Concept 31:20 Sum 2: Mr. Ramesh — Abnormal Goods 57:08 Sum 3: Sen & Company — Price Level Changes 1:15:28 Loss of Profit Policy — Key Terms & 7 Steps 1:25:50 Sum 4: Consequential Loss — Full Solution 1:50:15 Closing & Recap 🔔 Subscribe for more One Shot Revisions of CMA Inter Group 1 & Group 2 — Financial Accounting, Corporate Accounting & more, only on this channel! 📲 Follow for updates: 📚 Join Our CA/ CMA Foundation & Intermediate Classes 👉 Modes: Face-to-Face (Kolkata), Live Online, Google Drive, and Pendrive 📞 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩: / 🌐 𝐕𝐢𝐬𝐢𝐭: ‎🌐 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩 𝐂𝐡𝐚𝐧𝐧𝐞𝐥: 🌐 𝐓𝐞𝐥𝐞𝐠𝐫𝐚𝐦: 🌐 𝐈𝐧𝐬𝐭𝐚𝐠𝐫𝐚𝐦: #CMAInter #InsuranceClaims #FinancialAccounting