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CMA Foundation · Fundamentals of Financial and Cost Accounting · Financial Statements of a Not-for-Profit Organisation

Which one of the following items is a capital receipt in the books of a not-for-profit organisation?

Proceeds from sale of old furniture are a capital receipt because they arise from disposing of a fixed asset and are non-recurring. Subscriptions, interest on investments and hall rent are recurring revenue receipts that appear on the credit side of the Income and Expenditure Account.

  1. AAnnual subscriptions from members
  2. BInterest on investments
  3. CProceeds from sale of old furnitureCorrect
  4. DRent received from letting out the hall

Explanation

Sale of a fixed asset such as furniture brings a non-recurring receipt that reduces the asset and is a capital receipt. Subscriptions, interest and hall rent are recurring revenue incomes credited to the Income and Expenditure Account.

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