CSEET · Fundamentals of Accounting · Accounting for Non-Profit Organizations
In the Income and Expenditure Account of a non-profit organisation, which of the following items is shown on the expenditure (debit) side?
Honorarium paid to the secretary is a revenue expense of the year, so it is debited in the Income and Expenditure Account. Capital receipts such as legacies and capitalised entrance fees, and purchase of furniture, are balance sheet items.
- AEntrance fees capitalised as per rules
- BHonorarium paid to the secretary for the yearCorrect
- CLegacy received for the building fund
- DPurchase of furniture during the year
Explanation
Honorarium to the secretary is a revenue expense of the period and is debited in the Income and Expenditure Account. Capitalised entrance fees and legacies are capital receipts, and furniture purchase is a capital expenditure, so they appear in the Balance Sheet instead.
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