Donations received for a special purpose will be transferred to the ___________.
A
Income and expenditure account
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B
Asset side of the balance sheet
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C
Liabilities side of the balance sheet
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D
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.