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CS Professional · CSR and Social Governance · Financial and Non-financial Reporting of Different Non-Corporate Entities

Lotus Charitable Trust's Receipts and Payments Account for 2025-26 shows subscriptions received of Rs 4,80,000. Subscriptions outstanding were Rs 30,000 at the start and Rs 50,000 at the end of the year. Subscriptions received in advance were nil at both dates. What subscription income goes to the Income and Expenditure Account?

Subscription income is Rs 5,00,000. Cash received of Rs 4,80,000 is reduced by opening arrears of Rs 30,000, which relate to the earlier year, and increased by closing arrears of Rs 50,000, which relate to this year. Accrual accounting requires this adjustment.

  1. ARs 5,00,000Correct
  2. BRs 4,60,000
  3. CRs 4,80,000
  4. DRs 5,30,000

Explanation

Income = receipts 4,80,000 - opening outstanding 30,000 (belongs to the earlier year) + closing outstanding 50,000 = 5,00,000. Rs 4,60,000 results from reversing the outstanding adjustments.

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