CA Foundation · Accounting · Financial Statements of Not-for-Profit Organisations
Which of the following is shown on the liabilities side of a not-for-profit organisation's Balance Sheet?
Subscriptions received in advance are shown as a liability, because the organisation has received money for a future period and still owes the related membership benefits. Subscriptions receivable, prepaid insurance and stationery stock are all assets.
- ASubscriptions receivable
- BPrepaid insurance
- CSubscriptions received in advanceCorrect
- DStock of stationery
Explanation
Subscriptions received in advance relate to a future period, so they are an obligation to provide services and are a liability. The other three items are assets.
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