What is my company’s journal entry for a judgment against an employee who committed fraud?
The company obtained a winning judgment against a former employee for fraud, involving future receipts and property recording in journal entries. This article analyzes how to recognize assets and income under the premise of no cash transactions and no adjustment to retained earnings, and provides specific accounting treatment ideas.
We recently had a judgment made in our favor against a former employee who committed fraud. When we receive payments from this employee, what should the journal entry be?
We also received a house in the judgment and need to add the asset to our books. How would we make that journal entry when no cash transaction was made, and we do not want to alter the retained earnings?