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CMA Foundation · Fundamentals of Financial and Cost Accounting · Financial Statements of a Not-for-Profit Organisation

In the balance sheet of a not-for-profit organisation, the accumulated fund is best described as:

The accumulated fund is the excess of assets over outside liabilities, built up from past surpluses and capitalised receipts such as entrance fees. It is the capital of a not-for-profit organisation, not its cash balance, advance subscriptions or earmarked special funds.

  1. AThe excess of assets over outside liabilities, built up from past surpluses and entrance fees capitalisedCorrect
  2. BThe cash and bank balance available at the year end
  3. CThe amount of subscriptions received in advance
  4. DThe total of special funds created for specific purposes

Explanation

Accumulated (capital) fund is the balancing figure: total assets less outside liabilities, representing past surpluses plus capitalised items. Cash balance, advance subscriptions and special funds are separate items; advance subscriptions are a liability.

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