Question

How the following items are dealt with in the final accounts of the not-for-profit organisation?

1. Sale of sports materials
2. Life membership fees
3. Tournament fund

Answer 1

1. Sale of sports materials: The sale proceeds of old sports materials like balls and bats, etc., are revenue receipts.
2. Life membership fees: Amount received like membership fee from members is a capital receipt as it is non-recurring in nature.
3. Tournament fund: It is non-recurring in nature and is a capital receipt. It is shown on the liabilities side of the balance sheet. The opening balance of the fund is added to the donations received, and the expenses incurred for the tournament are subtracted. The net balance is carried forward on the liabilities side.