State whether the following statement is True or False with reasons. Charitable Institutions prepare Profit and Loss Account, at the end of every financial year. - Book Keeping and Accountancy

MCQ

True or False

State whether the following statement is True or False with reasons.

Charitable Institutions prepare Profit and Loss Account, at the end of every financial year.

Options

True
False

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Solution

Charitable Institutions prepare Profit and Loss Accounts at the end of every financial year. - False.

Explanation:

Charitable Institutions, Not for Profit concerns, do not undertake any trading activities and hence instead of a Profit and Loss Account prepare an Income-Expenditure Account to record all revenue expenses/losses and revenue incomes/gains of current year.

Concept: Accounts of “Not for Profit” Concerns

Is there an error in this question or solution?

Chapter 7: Accounts of 'Not For Profit' Concerns - Exercise [Page 228]

Q 4 Q 3 Q 5

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