Question

How would you treat the following item in the case of a 'not-for-profit 'organization?

"Receipts from Charity Show Rs.7,000. Expenses on Charity Show Rs.3,000".

Options

• Debit side of Income and Expenditure Account

• Credit side of Income and Expenditure Account

• Debit side of income and credit side of expenditure

• Credit side of income and debit side of expenditure

Answer 1

Credit side of Income and Expenditure Account

Explanation:

There is no separate money for this. Receipts from the Charity Show would be displayed on the credit side of the Income and Expenditure Account, and expenses from the Charity Show would be subtracted from the receipts, with the net amount being shown on the credit side.