Entrance fee of Rs. 2000 received by social club is _____.

capital expenditure

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capital receipts

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revenue expenditure

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revenue deficit

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Solution

The correct option is A capital receipts
Entrance fee of Rs. 2000 received by social club is an example of capital receipt. This is the income flow from one of the following sources.
1. Cash from the sale of fixed assets
2. Cash from the sale of shares in the business
3. Cash from the issuance of a debt instrument which includes loans and bonds.
This should result either the reduction in government assets (sale of share, disinvestment) or increase in some liability (government borrowings).

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During an year, a club received Rs 1,00,000 as entrance fees. According to the policy of the club, 40% of the entrance fees is to be capitalized. What amount shall be entered in Income & Expenditure account.

Q. Entrance fee of Rs. 20,000 received by a club is a _____________.

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How will you deal with the Entrance Fees while preparing the final accounts of New Delhi Sports Club for the year ended 31st March, 2017 in each of the following cases:

Case 1. During the year 2016-17, Entrance Fees received Rs
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Case 2. During the year 2016-17, Entrance Fees received Rs 1,20,000. It is the policy of the club to treat the Entrance Fees as ' Revenue Receipt'.

Case 3. During the year 2016-17, Entrance Fees received Rs 1,20,000. It is the policy of the club to treat the Entrance Fees as 'Capital Receipt'.

Case 4. During the year 2016-17, Entrance Fees received Rs 1,20,000. According to the policy of the club, 30% of the Entrance Fees is to be capitalised.

A non-profit organization received Rs. 10,000 as the entrance fee of a new member. If 20% of the fee has to be capitalized, what is the amount of fee needs to be shown in the income and expenditure account?

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