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

Kaveri Sports Club received entrance fees of ₹60,000 during the year and, as per its constitution, entrance fees are to be capitalised. Subscriptions received were ₹3,50,000, with ₹20,000 received in advance for the next year. What is the total income shown for these two items in the Income and Expenditure Account?

The income shown is ₹3,30,000. Entrance fees of ₹60,000 are capitalised and kept out of income, and subscriptions of ₹3,50,000 are reduced by ₹20,000 received in advance for the next year.

  1. A₹4,10,000
  2. B₹3,90,000
  3. C₹3,30,000Correct
  4. D₹3,70,000

Explanation

Entrance fees are capitalised, so they go to the Balance Sheet and not to income. Subscriptions for the year = 3,50,000 − 20,000 advance = ₹3,30,000 (no opening or closing dues are given). Option ₹3,90,000 wrongly includes the entrance fees.

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