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Question
Explain the term surplus in Income and Expenditure Account.
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Solution
- Surplus in the structure of an Income and Expenditure Account refers to the excess of income over expenditure for a given accounting period.
- A non-trading organization, such as a non-profit or a club, generates more revenue than it spends on operations and activities, resulting in a surplus.
- The surplus is added to the organization's capital fund and represents a positive financial performance over the term.
RELATED QUESTIONS
The closing balance of this account shows surplus/deficit ______.
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 will Income and Expenditure account benefit a non-trading sports organisation?
This account is equivalent to the Profit and Loss Account of a business concern.
It serves as the basis for preparing the Balance Sheet of a non-trading organisation.
It contains only revenue items.
On the other hand, if the total of ______ side is greater than the total of ______ side, it is known as 'deficit' or 'excess of expenditure over income'.
All donations received by non-trading concerns are entered in the liabilities side of the balance sheet. Justify either for or against.
Mention any two features of the Income and Expenditure Account.
