Donations received for a special purpose will be transferred to the ___________.

Income and expenditure account

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Asset side of the balance sheet

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Liabilities side of the balance sheet

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Debit side of the ledger

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Solution

The correct option is C Liabilities side of the balance sheet
The amount of general donation is an income and we credit it to Income and Expenditure Account.
Specific Donation: It means the donation should be used only for the library, i.e., it is a specific donation.
Specific donations are capitalized and are shown on the liabilities side of the Balance Sheet.

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