Skip to content

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

Sunrise Club received Rs 40,000 as subscriptions during the year, of which Rs 6,000 related to the previous year and Rs 4,000 related to the next year. In the Receipts and Payments Account, what amount will appear on the receipts side for subscriptions?

Rs 40,000 appears on the receipts side, because the Receipts and Payments Account records actual cash received regardless of the period it relates to. Adjustments for arrears and advance subscriptions are made only in the Income and Expenditure Account.

  1. ARs 30,000
  2. BRs 40,000Correct
  3. CRs 34,000
  4. DRs 50,000

Explanation

The Receipts and Payments Account records actual cash received irrespective of the period to which it relates. So the full Rs 40,000 appears. Rs 30,000 (40,000 - 6,000 - 4,000) would be the current-year amount used in the Income and Expenditure Account, which is the wrong basis here.

Did you get it right without looking?

One question tells you little. A timed set on Accounting for Non-Profit Organizations shows your real accuracy, how long you take and where you lose marks.

Practise Accounting for Non-Profit OrganizationsFree diagnostic mock

More Accounting for Non-Profit Organizations questions