Question 7 Chapter 1 of +2-A - T.S. Grewal 12 Class Part

Question 7 Chapter 1 of +2-A

Table of Contents

The solution of Question 7 Chapter 1 of +2-A: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

7. How are the following dealt with in the accounts of a Not-Profit Organisation?

Case I	Debit	Credit	Case II	Debit	Credit
		50,000	Match Fund		50,000
Prize Fund			Match Expenses	35,000
Prizes Awarded	12,000		Investments of Match Funds	60,000
Match Expenses	15,000		Interest on Match Fund Investment		3,000
			Prizes Awarded	19,000

The solution of Question 7 Chapter 1 of +2-A: –

In the Books of __________________
Receipts and Payment A/c
Expenditure		Amount	Income	Amount
To Match Expenses A/c	50,000

Note: – In this case, there is no specific fund maintained to meet the expenditure related to the Matches, So that’s why it will be debited to the income and expenditure a/c

Balance Sheet
Liabilities		Amount	Assets	Amount
Prize Fund	50,000
Less: – Prizes awarded	12,000	38,000

Note: – In this case, there is a specific fund maintained to meet the expenditure related to the Prize,
So that’s why it will be directly posted in the balance sheet by deducting the amount of
expenditure from the total amount of funds.

In the Books of __________________
Receipts and Payment A/c
Expenditure		Amount	Income	Amount
To Prize Awarded A/c	19,000

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Note: – In this case, there is no specific fund maintained to meet the expenditure related to the Prize,
So that’s why it will be debited to the income and expenditure a/c

Balance Sheet
Liabilities		Amount	Assets	Amount
Match Fund	1,00,000
Add: – Interest on Match Fund Investment	3,000
Less: – Match Expenses	35,000	68,000

Note: – In this case, there is a specific fund maintained to meet the expenditure related to the Match,
So that’s why it will be directly posted in the balance sheet by deducting the amount of
expenditure from the total amount of funds.