This one is a whopper! I don't agree with what was done here but it happened before I started working for the company and they need me to clean up the entries. Please bare with me on this one...

This company sells UPS units and offers a warranty - replace or repair. A client was sold a unit and while installing the unit was damaged fault being the technican, so a replacement unit was gotten from the manufacturer. However, the company also claimed from it's employer's liability insurance, where would the funds received from this cheque be booked.

Now the client has incurred charges due sending back the unit directly and I have been keeping a record through a credit memo, can the insurance cheque be applied against this credit memo? How?

Thanks in advance...

This one is a whopper! I don't agree with what was done here but it happened before I started working for the company and they need me to clean up the entries.

Oh jeez, the number of times I've had to do that, which would on... oh, all but one job I'd say.


This company sells UPS units and offers a warranty - replace or repair. A client was sold a unit and while installing the unit was damaged fault being the technican, so a replacement unit was gotten from the manufacturer. However, the company also claimed from it's employer's liability insurance, where would the funds received from this cheque be booked.

Against wherever you booked the cost of the replacement. (If they aren't accruing warranty expense/warranty liability, then any costs for warranty stuff should be expenses at the time of payment to some warranty expense. So if there's anything still left after insurance payment, it should be in that expense.)


Now the client has incurred charges due sending back the unit directly and I have been keeping a record through a credit memo, can the insurance cheque be applied against this credit memo? How?

I am not quite sure I understand that. Do you mean that the client paid up front stuff, and you have made a credit to their receivable? I don't see how the insurance you get affects the credit your client gets. Those are two different matters, assuming I'm understanding you correctly.