Skip to content

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

A sports club had a stock of sports material of ₹25,000 on 1 April 2024. During the year it purchased sports material for ₹90,000, of which ₹10,000 was still unpaid at year end (creditors on 1 April 2024 were ₹15,000 and were fully paid in the year). Closing stock on 31 March 2025 was ₹30,000. What is the sports material consumed to be charged to the Income and Expenditure Account?

Sports material consumed is ₹85,000: opening stock ₹25,000 plus purchases of ₹90,000 less closing stock ₹30,000. Since the ₹90,000 already represents total purchases for the year including the unpaid amount, no further creditor adjustment is required.

  1. A₹85,000Correct
  2. B₹75,000
  3. C₹95,000
  4. D₹90,000

Explanation

Purchases are taken on an accrual basis as given: total purchases for the year are ₹90,000 (the figure includes the unpaid ₹10,000, so no adjustment is needed). Consumption = opening stock 25,000 + purchases 90,000 - closing stock 30,000 = ₹85,000. Option B wrongly subtracts the unpaid amount from purchases, and option C ignores closing stock adjustment sign.

Did you get it right without looking?

One question tells you little. A timed set on Financial Statements of Not-for-Profit Organisations shows your real accuracy, how long you take and where you lose marks.

Practise Financial Statements of Not-for-Profit OrganisationsFree diagnostic mock

More Financial Statements of Not-for-Profit Organisations questions