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

In the books of a club, which of the following is treated as a capital receipt and therefore NOT shown on the credit side of the Income and Expenditure Account?

Entrance fees treated as a capital receipt under the club's policy are credited directly to the Capital Fund, not to the Income and Expenditure Account, because they are non-recurring in nature. Subscriptions, investment interest and scrap sales are revenue receipts and are shown as income.

  1. AAnnual subscriptions from members
  2. BEntrance fees treated as capital receipt as per the club's policyCorrect
  3. CInterest on investments
  4. DProceeds from sale of old newspapers

Explanation

Entrance fees (admission fees) are non-recurring and, where the club's policy or rules treat them as capital receipts, they are added to the Capital Fund and shown on the Balance Sheet. Subscriptions, interest and scrap sales are revenue items and appear in the Income and Expenditure Account.

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