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Question
All donations received by non-trading concerns are entered in the liabilities side of the balance sheet. Justify either for or against.
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Solution
Against:
- All donations received by non-trading concerns are not entered on the liabilities side of the balance sheet.
- Only specific types of donations, such as those received for a specific purpose or with certain conditions attached (restricted donations), are recorded as liabilities until the conditions are fulfilled.
- General donations, which are meant to support the organization's overall activities, are recorded as income in the Income and Expenditure Account and, if unspent, may appear on the assets side as part of the accumulated funds or reserves.
RELATED QUESTIONS
Income and expenditure contain only ______ items.
Give any two uses of Income and Expenditure Account.
Explain any two features of Income and Expenditure account.
______ account is prepared to ascertain surplus or deficit at the end of an accounting year.
How is Receipts & Payments Account different from Income & Expenditure Account?
Why and by whom is an Income and Expenditure Account prepared?
State any one point of difference between Receipt and Payment account and Income and Expenditure Account.
Mention any two features of the Income and Expenditure Account.
Give five differences between Profit and Loss Account and Income and Expenditure Account.
Distinguish between Receipt and Income.
