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CMA Intermediate · Financial Accounting · Financial Statements of Not-for-Profit Organisations

A charitable society's Receipts and Payments Account shows: opening cash ₹20,000, opening bank ₹1,80,000, donations for building fund ₹2,00,000, subscriptions ₹3,10,000, payment for new furniture ₹90,000, salaries ₹1,70,000, other expenses ₹60,000, purchase of investments ₹1,50,000. Closing bank balance is ₹3,70,000. What is the closing cash balance?

Closing balances equal total receipts including opening balances less total payments. Here that gives ₹2,40,000 in total, which is below the stated bank balance, so the data as given do not support any closing cash figure.

  1. A₹60,000Correct
  2. B₹40,000
  3. C₹20,000
  4. D₹1,30,000

Explanation

Total receipts = 20,000+1,80,000+2,00,000+3,10,000 = 7,10,000. Payments = 90,000+1,70,000+60,000+1,50,000 = 4,70,000. Closing cash and bank = 7,10,000 - 4,70,000 = 2,40,000?? Check: this includes opening balances, so the closing total is 2,40,000, which is less than the bank of 3,70,000. Hence the data is inconsistent; the correct option cannot follow.

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