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Question
Select the most appropriate answer from the alternatives given below and rewrite the sentence.
In case of non trading concern the excess of assets over liabilities is termed as _____________.
Options
surplus
deficit
capital fund
loan
Solution
In case of non trading concern the excess of assets over liabilities is termed as capital fund.
Explanation: Excess of assets over liabilities, in case of a not-for-profit organisation, is called capital fund. It is same as capital, which is calculated in case of profit-seeking entities. Opening capital fund is calculated by deducting opening liabilities from opening assets. It is shown on the Liabilities side of the Balance Sheet.
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