Advertisements
Advertisements
Question
Donations received for a special purpose ______
Options
Should be credited to the Income and Expenditure Account.
Should be credited to a separate account and shown on the Balance Sheet.
Should be shown on the assets side of the Balance Sheet.
Should not be recorded at all.
MCQ
Fill in the Blanks
Solution
Donations received for a special purpose Should be credited to a separate account and shown on the Balance Sheet.
Explanation:
Donations received for a specific purpose must be used for a specific activity - this is a capital receipt. It should be recorded in a separate account, and expenses should be deducted solely from that account. The account's balance will be shown as a liability on the Balance Sheet.
shaalaa.com
Receipts and Payments Account
Is there an error in this question or solution?