CSEET · Fundamentals of Accounting · Accounting for Non-Profit Organizations
Greenfield Society had a Prize Fund of ₹50,000 at the start of the year. During the year it received ₹6,000 as interest on the Prize Fund investments and ₹4,000 as fresh donations for the fund, and it awarded prizes costing ₹9,000. Under the usual treatment, what is the balance of the Prize Fund at the year end?
When interest and donations for the fund are added and prizes are charged to it, the fund closes at 50,000 + 6,000 + 4,000 − 9,000, which is ₹51,000. These items bypass the Income and Expenditure Account.
- A₹51,000Correct
- B₹41,000
- C₹45,000
- D₹60,000
Explanation
Interest and donations are added to the fund and prizes awarded are charged against it, with nothing passing through Income and Expenditure. Closing fund = 50,000 + 6,000 + 4,000 − 9,000 = ₹51,000. Option ₹41,000 results from subtracting the additions, while ₹60,000 ignores the prizes.
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