Question :
How would the following items be shown in the case of a not-for- profit organisation?
Receipts from Charity show = Rs.8,000
Expenses on Charity show = Rs.5,000
Option 1:
Net Charity fund of Rs.3,000 will be shown on liabilities side of the Balance Sheet
Option 2:
Receipts and expenses will be shown on credit and debit side respectively of Income and Expenditure A/c
Option 3:
Rs.3,000 will be added to capital fund as profit from charity show
Option 4: None of these
Correct Answer:
Receipts and expenses will be shown on credit and debit side respectively of Income and Expenditure A/c
Solution : Receipts from Charity Shwo of Rs.8,000 will be shown on the credit side and expenses on Charity Show of Rs.5,000 will be shown on the debit side of Income and Expenditure A/c. Hence, the correct option is 2.
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