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Question
______ account is prepared to ascertain surplus or deficit at the end of an accounting year.
Options
Income and Expenditure
Balance sheet
Profit and Loss
Receipts and Payment
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Solution
Income and Expenditure account is prepared to ascertain surplus or deficit at the end of an accounting year.
Explanation:
The Income and Expenditure Account is a nominal account created by non-profit organizations at the conclusion of the fiscal year to document their current revenue earnings and expenses. Following the accrual foundation of accounting, the ultimate balancing figure decides whether there is a surplus (revenue exceeds expenditure) or a deficit.
RELATED QUESTIONS
State any three points of difference between ‘Receipts and Payment Account’ and ‘Income and Expenditure Account’.
The closing balance of this account shows surplus/deficit ______.
How will Income and Expenditure account benefit a non-trading sports organisation?
It is a summary of all incomes and expenses of the current accounting year. It is prepared to know the surplus or deficit during the accounting year.
The closing balance of this Account shows surplus or deficit for the year.
It serves as the basis for preparing the Balance Sheet of a non-trading organisation.
It contains only revenue items.
If the total of ______ side is greater than the total of ______ side, it is called ‘surplus’ or ‘excess of income over expenditure’.
Explain the term surplus in Income and Expenditure Account.
All donations received by non-trading concerns are entered in the liabilities side of the balance sheet. Justify either for or against.
