Question

Any gain or loss on the sale of the old assets is taken to which account in the case of a 'not-for-profit' organization?

Options

• Income and Expenditure Account

• Receipt and Payment Account

• Balance sheet

• None of these

Answer 1

Income and Expenditure Account

Explanation:

Any gain or loss on the sale of an old asset is taken to the Income and Expenditure Account of the year. For example, if an item with a book value of Rs.800 is sold for Rs.700, the amount of Rs.700 will be shown as a receipt in the Receipts and Payments Account, and Rs.100 will be shown as a loss on the sale of an old asset on the income side of the Income and Expenditure Account, and Rs.800 will be deducted from the total book value of the furniture in the balance sheet.