A government received insurance proceeds of $35,000 in the General Fund for water and smoke damage that occurred at City Hall. What journal entry best describes the accounting treatment in the General Fund for the receipt of these funds?

Question

Quizplus · Accepted Answer

The insurance proceeds are considered an other financing source, as they are not related to any ongoing operations or regular revenue streams. Therefore, the entry should be a debit to cash and a credit to other financing sources to reflect the increase in available funds for the government to use.

A Government Received Insurance Proceeds of $35,000 in the General