Multiple choice

Insurance claim for stock damaged by fire is

  1. capital receipt

  2. revenue receipt

  3. advance receipt

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 It will be considered as Revenue receipt and not a Capital expenditure and the journal entry passed will be:Insurance Company's Claim A/c Dr. Loss by fire A/c Dr.
To Stock A/c  (Being goods lost by fire and insurance company's claim received.)

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