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Question
Answer in one sentence only.
Why Income and Expenditure Account is prepared?
Solution
Income and Expenditure Account is prepared to ascertain whether the concern has sufficient income to meet its expenses.
RELATED QUESTIONS
Outstanding subscription at the end of the Accounting Year represents _______.
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Write the word/phrase/term, which can substitute the following sentence.
Donation received for a specific purpose.
Write the word/phrase/term, which can substitute the following sentence.
An Account which records only revenue items in case of Not for profit concern.
State whether the following statement is True or False with reasons.
Income and Expenditure Account is Real Account.
State whether the following statement is True or False with reasons.
Excess of Assets over liabilities is called Capital Fund.
Subscription received from the members is considered as ________ receipts.
Answer in one sentence only.
Which organisations prepare Income and Expenditure Account?
Library Books ₹______? Less 10 % Depreciation ₹ 5,000 = ₹ 45,000
Find odd one :
(Presentation of Subscription only)
| Balance Sheet as on 01.04.2018 | |||||
| Liabilities | Amt. ₹ | Amt. ₹ | Assets | Amt. ₹ | Amt .₹ |
|
Subscription received in Advance for 2018 - 19 |
20,000 | Outstanding Subscription | |||
| 2016 - 17 | 26,000 | 61,000 | |||
| 2017 - 18 | 35,000 | ||||
| Dr | Receipts and Payments Account for the year ending 31.03.2019. | Cr | |||||
| Receipts | Amt. ₹ | Amt. ₹ | Payments | Amt.₹ | Amt. ₹ | ||
| To Subscriptions | |||||||
| 2016 - 17 | 23,000 | 4,84,000 | |||||
| 2017 - 18 | 30,000 | ||||||
| 2018 - 19 | 4,10,000 | ||||||
| 2019 - 20 | 21,000 | ||||||
Adjustments :
Outstanding Subscription for 2018 - 19 is ₹ 32,000
With the above information present the item Subscription in Income and Expenditure Account for the year ended 31.03.2019 Balance Sheet as on the date.
| Dr | Receipts and Payments Account for the year ending 31.03.2018. | Cr | |||||
| Receipts | Amt. ₹ | Amt. ₹ | Payments | Amt.₹ | Amt. ₹ | ||
| To Subscriptions | |||||||
| 2016 - 17 | 2,000 | ||||||
| 2017 - 18 | 60,000 | ||||||
| 2018 - 19 | 4,500 | 66,500 | |||||
Adjustments :
Subscription Outstanding for the year 2017 - 18 is ₹ 6,000.
During previous year Subscription received in advance for 2017 - 18 is ₹ 2,000.
Outstanding subscription of 2016 - 2017 is ₹ 2,500
With the help of the above information present the item Subscription in Income and Expenditure Account for the year ending 31.03.2018 and Balance Sheet as on that date.
From the following transactions of Receipts and Payments Account of “Pavan - Putra Hanuma Vyayamshala” Parbhani, and the adjustments given, you are required to prepare Income and Expenditure Account and Balance Sheet as on 31st March 2019.
| Dr | Receipts and Payments Account for the year ending 31.03.2019. | Cr | |||||
| Receipts | Amount ₹ |
Payments | Amount ₹ |
||||
| To Balance b/d | By Salaries | 6,000 | |||||
| Cash in Hand | 5,000 | By Entertainment Expenses | 2,480 | ||||
| To Subscriptions | By Sundry Expenses | 1,300 | |||||
| 2018 - 19 | 18,000 | By Electricity Charges | 1,200 | ||||
| 2019 - 20 | 410 | 18,410 | By Rent | 700 | |||
| To Donations | 6,000 | By Investment | 15,000 | ||||
| To Receipts from Entertainment | 5,400 | By Printing and Stationery | 800 | ||||
| To Interest | 400 | By Postage | 3,200 | ||||
| To Entrance fees | 6,200 | By Fixed Deposit | 3,900 | ||||
| By Balance c/d | |||||||
| Cash in Hand | 830 | ||||||
| Cash at Bank | 6000 | 6,830 | |||||
| 41,410 | 41,410 | ||||||
Adjustments:
1) There are 500 members paying an annual Subscription of ₹ 50 each
2) Outstanding Salary was ₹ 1,200
3) The Assets on 01.04.2018 were as follows: Building ₹ 50,000, Furniture ₹ 15,000
4) Provide depreciation on Building and Furniture at 5% and 10% respectively.
5) 50% Entrance Fee is to be capitalized.
6) Interest on Investment at 5% p. a. has accrued for 6 months.
7) Capital Fund ₹ 70,000 on 01.04.2018
(Newly Started Art Circle)
“Jeevan Jyoti Art Circle” a newly established concern has presented the following information.
| Dr | Receipts and Payments Account for the year ending 31.03.2018. | Cr | |||||
| Receipts | Amount ₹ |
Amount ₹ |
Payments | Amount ₹ |
Amount ₹ |
||
| To Admission fees | 22,000 | By Furniture | 12,000 | ||||
| To Subscriptions | 40,000 | By Stationery | 4,000 | ||||
| To Donations | 18,000 | By Office Rent | 2,600 | ||||
| By Newspapers & Periodicals | 300 | ||||||
| By Telephone Expenses | 560 | ||||||
| By Investments | 23,000 | ||||||
| By Balance c/d | |||||||
| Cash in Hand | 7,540 | ||||||
| Cash at Bank | 30,000 | 37,540 | |||||
| 80,000 | 80,000 | ||||||
Adjustments:
1) Subscription Outstanding for the year was ₹ 5,000
2) Depreciate Furniture @10 % p.a
3) Full amount of Admission Fees and 50*% Donations are to be capitalized.
You are required to prepare Income and Expenditure Account for the year ending 31.03.2018 and Balance Sheet as on that date.
From the following Receipts and Payments Account “K.B.P. Engineering College” Nashik for the year ending on 31.03.2019 and additional information, prepare Income and Expenditure Account for the year ending 31.03.2019 and Balance Sheet as on that date.
| Dr | Receipts and payments Account for the year ending 31.03.2019. | Cr | |||
| Receipts | Amount ₹ | Payments | Amount ₹ | ||
| To Balance b/d | By Salaries to Teaching Staff | 11,70,000 | |||
| Cash in Hand | 18,000 | By Electricity Charges | 55,000 | ||
| Cash at Bank | 1,00,400 | By Books | 61,000 | ||
| To Interest | 55,000 | By Furniture | 51,000 | ||
| To Subscriptions | 28,300 | By Stationery | 21,850 | ||
| To Life Membership fees | 25,000 | By Fixed Deposit (31.03.2019) | 8,50,000 | ||
| To Donation | 7,00,000 | By Balance c/d | |||
| To Tuition Fees | 12,30,000 | Cash in Hand | 16,650 | ||
| To Term Fees | 2,00,800 | Cash at Bank | 2,00,000 | ||
| To Sundry Receipts | 8,000 | ||||
| To Admission Fees (Revenue) | 60,000 | ||||
| 24,25,500 | 24,25,500 | ||||
Additional Information :
| Particulars | 01.04.2018 ₹ | 31.03.2019 ₹ |
| Books | 6,00,000 | 6,00,000 |
| Furniture | 3,19,000 | 3,00,000 |
| Building Fund | 10,00,000 | ? |
| Fixed Deposit | 9,10,000 | ? |
| Capital Fund | 9,47,400 | ? |
1) 50% of Donation are for Building Fund and the balance is to be treated Revenue Income.
2) Outstanding subscription ₹ 5,300
3) Life membership fees are to capitalised
Income and Expenditure Account is prepared to find out __________.
From the following receipts and payments account of Tenkasi Thiruvalluvar Manram, prepare income and expenditure account for the year ended 31st March, 2019.
| Receipts | ₹ | Payments | ₹ |
| To Balance b/d | By Salaries | 20,000 | |
| Cash in hand | 14,000 | By Rent | 24,000 |
| To Interest received | 5,000 | By Travelling expenses | 2,000 |
| To Subscription | 55,000 | By Printing and stationery | 6,000 |
| To Legacies | 48,000 | By Investments made | 50,000 |
| To Entrance fees | 7,000 | By Sports equipment purchased | 33,000 |
| To Sale of furniture (Book value: ₹ 17,000) |
16,000 | By Balance c/d | |
| Cash in hand | 10,000 | ||
| 1,45,000 | 1,45,000 |
From the following receipts and payments account and the additional information given below, calculate the amount of subscription to be shown in the Income and expenditure account for the year ending 31st December, 2018.
| Receipts | ₹ | ₹ | Payments | ₹ |
| To Subscription | ||||
| 2017 | 28,000 | |||
| 2018 | 1,72,000 | |||
| 2019 | 12,000 | 2,12,000 | ||
Additional information: Subscription outstanding for the year 2018 is ₹ 8,000.
How will the following items appear in the final accounts of a club for the year ending 31st March 2017? Received subscription of ₹ 40,000 during the year 2016-17. This includes a subscription of ₹ 5,000 for 2015-16 and ₹ 3,000 for the year 2017-18. Subscription of ₹ 1,000 is still outstanding for the year 2016-17.
How will the following appear in the final accounts of Vedaranyam Sports club?
| Particulars | ₹ |
| Opening stock of bats and balls | 3,000 |
| Purchase of bats and balls during the year | 17,000 |
| Sale of old bats and balls | 2,000 |
| Closing stock of bats and balls | 4,000 |
From the following Receipts and Payments account of Shahu College, Kolhapur for the year ending 31st March, 2020 and additional information, prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as on that date:
| Dr. | Receipts and Payments Account for the year ended 31st March, 2020 |
Cr. | |
| Receipts | Amount (₹) | Payments | Amount (₹) |
| To Balance b/d | By Salaries | 11,77,500 | |
| Cash | 6,000 | By Printing and Stationery |
13,500 |
| Bank | 1,00,000 | By Books | 44,000 |
| To Interest | 30,000 | By Furniture | 39,000 |
| To Donation | 3,50,000 | By Drama Expenses | 45,000 |
| To Tuition Fees | 9,50,000 | By Postage | 3,500 |
| To Admission Fees | 32,500 | By Telephone Charges | 3,000 |
| To Drama Receipts | 50,000 | By Electricity | 30,500 |
| To Rent from use of Hall | 3,000 | By Magazine and Newspapers |
3,000 |
| To Legacies (Capital) | 30,000 | By Balance c/d | |
| Cash | 31,000 | ||
| Bank | 1,61,500 | ||
| 15,51,500 | 15,51,500 | ||
Additional information:
(1) Outstanding Salaries ₹ 35,000.
(2) 60% of donations are for Building Fund and Balance is to be treated as revenue income.
(3)
| Particulars | 1 - 4 - 2019 (₹) | 31 - 3 - 2020 (₹) |
| Capital Fund | 3,05,500 | ? |
| Building Fund | 4,13,500 | ? |
| Furniture | 1,63,000 | 1,50,000 |
| Books | 4,50,000 | 4,44,000 |
10% Depreciation on Furniture ₹ 12,000/- 3 Months
Following is the Receipts and Payments Account of Parnil Sports Club, Pune and additional information given below you are required to prepare Income and Expenditure Account for the year ended 31st March 2019 and a Balance Sheet as on that date.
| Dr. | Receipts and Payments Account for the year ended 31st March, 2019 |
Cr. | ||
| Receipts | Amount (₹) | Payments | Amount (₹) | |
| To Balance b/d | 5,000 | By Bank Overdraft (Repaid) | 32,000 | |
| To Subscriptions: | By Salaries | 10,000 | ||
| 2016-17 | 2,000 | 75,000 | By Electrical Charges | 4,000 |
| 2017-18 | 3,000 | By Municipal Taxes | 2,700 | |
| 2018-19 | 70,000 | By Purchase of Sports Materials | 50,000 | |
| To Donations | 15,000 | By General Expenses | 500 | |
| To Entrance fees | 1,700 | By Billiard Expenses | 3,000 | |
| To Life membership fees (Revenue) | 17,000 | By Repairs to Ground | 500 | |
| To Tournaments Receipts | 60,000 | By Tournaments Exp. | 50,000 | |
| By Balance c/d: | ||||
| Cash in Hand | 7,000 | |||
| Cash at Bank | 14,000 | |||
| 1,73,700 | 1,73,700 | |||
Additional Information :
- 50% Donations are towards Building Fund.
- 70% entrance fees should be capitalised.
- Subscriptions ₹ 500 for the year 2016-17 ₹ 1,000 for 2017-18 are still in arrears.
- Following are the balances appeared in the books as on 1-4-2018 :
Building Fund ₹ 47,000, Bank Overdraft ₹ 32,000, Land ₹ 1,50,000, Sports Materials ₹ 30,000. Outstanding Subscription for 2016-17 is ₹ 2,500 and 2017-18 is ₹ 4,000. - Outstanding Subscription for current year is ₹ 8,000.
- Closing Stock of Sports Material was ₹ 8,000 on which depreciation to be provided at 12.50% p.a.
Complete the following table:
| Sr. No |
Income (₹) |
Expenditure (₹) |
Surplus/Deficit (₹) |
| 1. | 10,000 | ? | 5,000 (Deficit) |
Complete the following table:
Salaries paid during the year
| Total (₹) |
Prepaid/ Outstanding |
(₹) | Expenditure for the year |
| ? | Outstanding | 600 | 5,100 |
Donation for Scholarship Fund is ______.
Following is the Receipts and Payments Account of "Satara Sports Club". Prepare Income and Expenditure Account for the year ending 31 - 03 - 2022. Also prepare Balance sheet as on 31 -03-2022.
| Dr. | Receipts and Payments Account for the year ending 31 - 03 - 2022 | Cr. | |||
| Receipts | Amount (₹) | Amount (₹) | Payments | Amount (₹) | Amount (₹) |
| To Balance b/d | By Salaries | 10,000 | |||
| Cash in Hand | 9,000 | 33,000 | By Rent (Including ₹ 4,000 for 2020-21) | 10,00 | |
| Cash at Bank | 24,000 | By Electricity Charges | 2,900 | ||
| To Subscription | By Fixed Deposit | 1,20,000 | |||
| 2020 - 21 | 8,000 | 1,04,000 | By Printing and Stationery | 1,500 | |
| 2021 - 22 | 89,000 | By General Expenses (Including ₹ 1000 paid for next year) | 11,000 | ||
| 2022 - 23 | 7,000 | By Sports Material | |||
| To Entrance Fees | 16,000 | Purchased | 80,000 | ||
| To Donation for | By Balance c/d | ||||
| Building Fund | 1,40,000 | Cash in Hand | 17,800 | 67,800 | |
| To Interest | 1,200 | Cash at Bank | 50,000 | ||
| To Sale of Furniture (Book Value ₹ 16,000) | 9,000 | ||||
| 3,03,200 | 3,03,200 | ||||
Adjustments:
(1) Outstanding subscription for current year is ₹ 9,000.
(2) Outstanding rent for current year amounted to ₹ 2,000.
(3) Entrance Fees are to be treated as Revenue Income.
(4) Stock of sports material as on 01 - 04 - 2021 ₹ 12,000 and on 31 - 03 - 2022 ₹ 28,000.
Mumbai University prepares ______ Account instead of a Profit and Loss account.
Mumbai University prepares ______ Account instead of a Profit and Loss account.
