hi guys today we’re going to learn fire insurance claim okay so at first I will tell you what is insurance what is insurance? Insurance is nothing but an arrangement by which a company and arrangement by which a company undertakes to provide a guarantee of a guarantee of compensation a guarantee of compensation for specified loss or damage okay and in insurance in this type of arrangement there are two parties one is insureR and the other one is insureD now who is insureR and who is insureD now insureR is the party who provide a guarantee of compensation for specified loss or damage to insureD okay and now in return the insureD pays to ensurR a premium a fixed amount of premium every year now we will see policies to cover different losses so many there are two policies that business usually say that is loss of toss loss of stock by fire remember this only by fire because in this chapter we are learning about fire insurance claim okay so the second policy would be loss of fixed assets fixed assets by fire when the talk and fixed asset such as furniture example furniture plant and machinery are destroyed by fire destroyed by fire because we are learning fire insurance claim okay then the company has to file a claim with the insurance company showing the showing the loss of showing the loss of stock or fixed assets stock or fixed assets so that they can caim the amount okay now we are going to see claim for loss of stock by fire so when the stock is destroyed by fire the value of stock should be estimated number one point estimation of stock on date of fire date of fire okay so that the claim has to be presented to the insurance company so there are certain steps to be followed such as preparing trading account preparing trading account to find to find what what we usually find that is GP gross profit then we have to prepare memorandum trading account memorandum trading account this account is prepared to find to find closing stock closing stock on the day of fire in the date of fire and the third step is to prepare statement of fire insurance claim fire insurance claim under average clause now this average clause i will explain it you later while doing example okay so but will prepare trading account that is to find gross profit and the second will prepare memorandum trading account to find closing stock then we’ll prepare statement of fire insurance claim under average clause which is very easy so in the next video we will solve some problems and I will show you how to prepare trading account, memorandum trading account, statement of fire insurance claim under average clause so please don’t miss the next video thank you