Question : Entrance/Admission Fee received by the NPO is:
Option 1: Added to the Capital fund in Balance Sheet.
Option 2: transferred to the credit of Income and Expenditure A/c
Option 3: shown in the debit of Income and Expenditure A/c
Option 4: shown as a separate item in the Liabilities side of the Balance Sheet.
Answer (1)
16th Jan, 2024
Correct Answer: transferred to the credit of Income and Expenditure A/c
Solution :
Entrance Fee or Admission Fee is the amount paid by a person at the time of becoming member of the not-for-profit organisation. Entrance Fee is a revenue receipt and therefore, is transferred to the credit of Income and Expenditure Account, being an income for the year.
Hence, the correct option is 2.
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