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State with reason how the following item will be treated while preparing the 'Income and Expenditure Account' and 'Balance Sheet' of a Not-for-Profit Organisation: Life membership fees - Accountancy

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Question

State with reason how the following item will be treated while preparing the 'Income and Expenditure Account' and 'Balance Sheet' of a Not-for-Profit Organisation:

Life membership fees

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Solution

Life membership fees are a capital receipt hence will be shown on the liabilities side of balance sheet only by adding to capital fund.

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2021-2022 (March) Term 2 - Outside Delhi Set 1
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