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Question
Explain the term deficit in Income and Expenditure Account.
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Solution
- Deficit in the context of an Income and Expenditure Account refers to the excess of expenditure over income within a specific accounting period.
- When a non-trading organization incurs more expenses than it earns in revenue during a given period, the result is a deficit.
- The deficit is deducted from the organization's capital fund to indicate poor financial performance throughout the period.
RELATED QUESTIONS
Income and Expenditure Account is a ______ account.
State any three points of difference between ‘Receipts and Payment Account’ and ‘Income and Expenditure Account’.
______ depicts the Capital fund of the organization.
How will Income and Expenditure account benefit a non-trading sports organisation?
How is Receipts & Payments Account different from Income & Expenditure Account?
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.
This account is equivalent to the Profit and Loss Account of a business concern.
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.
What is Income and Expenditure Account?
