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

Which of the following is treated as a capital receipt in the books of a non-profit organization and is therefore not credited to the Income and Expenditure Account?

A legacy received for a specific purpose, such as building a hall, is a capital receipt. It is non-recurring, so it is added to the Capital Fund or a specific fund and not credited to the Income and Expenditure Account. Subscriptions, interest and rent are recurring revenue income.

  1. AAnnual subscriptions from members
  2. BInterest on investments
  3. CLegacy received for a specific purpose, such as building a new hallCorrect
  4. DRent from letting out the club premises

Explanation

A legacy received is non-recurring and generally a capital receipt, especially when meant for a specific purpose like a building, so it is added to the Capital Fund or a specific fund. Subscriptions, interest and rent are recurring revenue items credited to the Income and Expenditure Account.

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