2023 · Q61
The insurance claim received on account of machinery damaged completely by fire is
General Accounting Principles, Auditing and InsuranceInsurance
- Acapital receipt
- Brevenue receipt
- Ccapital expenditure
- Drevenue expenditure
Explanation
An insurance claim for machinery completely destroyed by fire replaces capital, not trading income, so it is a capital receipt. Revenue receipts (B) arise from normal business operations such as sales. Hence A.