A spare tire was stolen from the company truck which was not insured

Accounting Dec 18, 2020

A spare tire was stolen from the company truck which was not insured. What are the two accounts that would be affected? Are they categorize as assets, liability or expenses?

Expert Solution

A spare tire stolen would be considered as expenses as it reduces the inventory assets. You need to be reporting an expense with the entry like loss as a result of theft. This theft expense would be reducing the income, which would, in turn, diminish the equity of the owner.

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