Multiple choice

How is abnormal loss treated in the balance sheet?

  1. Total value is shown on the asset side

  2. Value recovered from the Insurance Co. is shown on the asset side

  3. Amount due from the Insurance Co. is shown on the asset side

  4. No entry

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Abnormal loss is an unexpected, unusual loss (like fire or theft) that is compensated by insurance. The amount receivable from the insurance company is an asset and shown on the asset side of the balance sheet until settlement. Option C is correct.