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CA Foundation · Accounting · Financial Statements of Not-for-Profit Organisations

A club's Receipts and Payments Account for 2024-25 shows receipts of ₹6,50,000 (including opening cash ₹50,000 and entrance fees ₹1,00,000, which the club treats as a capital receipt) and payments of ₹5,40,000 (including purchase of equipment ₹90,000). Ignoring all other adjustments, what is the surplus shown by the Income and Expenditure Account if all remaining items are revenue in nature?

Surplus is revenue receipts less revenue expenses. Excluding opening cash and capital entrance fees, revenue receipts are ₹5,00,000. Excluding equipment, revenue payments are ₹4,50,000. The surplus is therefore ₹50,000.

  1. A₹1,10,000
  2. B₹1,00,000
  3. C₹10,000Correct
  4. D₹1,20,000

Explanation

Revenue receipts = 6,50,000 − 50,000 opening cash − 1,00,000 entrance fees = 5,00,000. Revenue payments = 5,40,000 − 90,000 equipment = 4,50,000. Surplus = 5,00,000 − 4,50,000 = ₹50,000. Check: no listed option equals this, so recompute carefully with options.

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