Question

Legacies should be treated as:

• A. Liability
• B. Revenue Receipt
• C. Asset
• D. Income

Hint:

Legacy = gift by will → shown as Revenue Receipt in Income and Expenditure A/c of non-trading organisations.

Answer 1

The Correct Option is B

Step 1: Meaning of legacy.
Legacy means the amount received by a non-trading organisation as a gift or bequest under a will.
Step 2: Nature of receipt.
- It is received occasionally and not regularly.
- It is not a capital receipt because it is not meant for long-term use or investment.
Step 3: Accounting treatment.
As per accounting treatment, legacies are treated as revenue receipts and recorded in the Income and Expenditure Account.
Step 4: Conclude.
Therefore, legacies are treated as revenue receipts.
Final Answer: \[ \boxed{\text{Revenue Receipt}} \]