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Question

Any donation received for a specific purpose is an ________.

A
Liability
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B
Assets
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C
Revenue receipts
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D
Capital receipts
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Solution

The correct option is D Capital receipts
Donation received by the non profit organization is a receipt and should be recorded in receipt and payment account.
A donation which is received as normal course without any specific condition, is considered as revenue receipt.
A donation which is received for a specific purpose is a capital receipts. This has to be utilized only for the specific purpose. This is a capital receipt.

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