Question :
Assertion (A): NPO do not maintain any capital account. Instead they maintain capital fund which is also called general fund that goes on accumulating received from year to year.
Reason (R): The capitalised items like legacies, entrance fees and life membership fees directly added to the capital fund.
Option 1:
Both Assertion (A) and Reason (R) are true and (R) is correct explanation of Reason (A)
Option 2:
Both Assertion (A) and Reason (R) are true but (A) is not correct explanation of Reason (R)
Option 3: Assertion (A) is true but Reason (R) is false
Option 4: Reason (R) is true but Assertion (A) is false
Correct Answer:
Both Assertion (A) and Reason (R) are true and (R) is correct explanation of Reason (A)
Solution :
NPO does not maintain any capital account. They maintain capital fund which is also called general fund that goes on accumulating received from year to year. The capitalised items like legacies, entrance fees and life membership fees directly added to the capital fund. Hence, the correct option is 1.
Related Questions
Trending Articles/News
