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

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

Purchase of furniture is a capital payment, so it does not appear in the Income and Expenditure Account. It is shown as an asset in the Balance Sheet. Subscriptions, honorarium and interest are revenue items and are taken to the Income and Expenditure Account.

  1. ASubscriptions received for the current year
  2. BPurchase of furniture for the club houseCorrect
  3. CHonorarium paid to the secretary
  4. DInterest received on fixed deposit

Explanation

The Income and Expenditure Account records only revenue items of the current year. Purchase of furniture is a capital payment, so it is added to the Balance Sheet as an asset. The other three are revenue receipts or payments and appear in the Income and Expenditure Account.

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