Question

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

Answer 1

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. Hence, instead of a Profit and Loss Account, prepare an Income-Expenditure Account to record all revenue, expenses/losses and income/gains of the current year.