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CSEET · Fundamentals of Accounting · Accounting for Non-Profit Organizations

In the books of a non-profit organisation, which of the following items is shown on the credit (income) side of the Income and Expenditure Account?

Subscriptions relating to the current year appear on the income side of the Income and Expenditure Account because they are revenue receipts earned in the period. Furniture purchases, loan repayments and capitalised entrance fees are capital items and belong in the Balance Sheet.

  1. APurchase of furniture
  2. BSubscriptions relating to the current yearCorrect
  3. CRepayment of a loan taken
  4. DEntrance fee treated as capital receipt

Explanation

The Income and Expenditure Account is a nominal account that records revenue items of the current year. Subscriptions for the current year are revenue income. Purchase of furniture and loan repayment are capital/balance sheet items, and a capitalised entrance fee goes to the Capital Fund, not this account.

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