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

Which of the following items appearing in a Receipts and Payments Account would NOT be shown on the Income and Expenditure Account of the same year?

The payment for purchase of a computer is not shown in the Income and Expenditure Account because it is capital expenditure and goes to the Balance Sheet as an asset. Salaries, interest received and sale of old newspapers are revenue items and are included.

  1. ASalaries paid
  2. BInterest received on investments
  3. CPayment for purchase of a computerCorrect
  4. DSale proceeds of old newspapers

Explanation

Payment for a computer is a capital expenditure, so it appears as an asset on the Balance Sheet and not in the Income and Expenditure Account (only depreciation on it is charged). Salaries, interest received and sale of old newspapers are revenue items and are included, after adjustments.

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