Question

Admission fee income should be ____________.

• A. Capitalized
• B. Treated as a Revenue
• C. Treated as revenue unless the amount is pretty large
• D. Treated as a Liability

Answer 1

The correct option is C Treated as revenue unless the amount is pretty large

Admission fees is a revenue receipt and should be recorded as revenue item. If its a large amount , the treatment may be different according to the policy of the organization.

Admission Fees :-

(a) The organization shall follow the rules or by-laws regarding this.

(b) In the absence of such rules, add the admission or entrance fees that the members pay only once for acquiring a membership to the Capital Fund.

(c) If such fees are of small amounts covering the expenses of admission only, we may credit the fees to Income & Expenditure Account.