How are the following dealt with in the accounts of a Not-for-Profit Organisation ?
Case I
Dr. (₹)
Cr. (₹)
Case II
Dr. (₹)
Cr. (₹)
Prize Fund
Prizes Paid
Match Expenses
12,000
15,000
50,000
Match Fund
Match Expenses
Investments of Match Fund
Interest on Match Fund
Investments
Prizes Paid
35,000
60,000
19,000 1,00,000
3,000
|
Case I
|
Dr. (₹)
|
Cr. (₹) |
Case II
|
Dr. (₹) | Cr. (₹) |
| Prize Fund Prizes Paid Match Expenses |
12,000
15,000 |
50,000 | Match Fund Match Expenses Investments of Match Fund Interest on Match Fund Investments Prizes Paid |
35,000 60,000 19,000 |
1,00,000 3,000 |
|
|
|
|
|
Case 1
Balance Sheet
Liabilities
Amount
(Rs)
Assets
Amount
(Rs)
Prize Fund
50,000
Less: Prize Paid
(12,000)
38,000
Note: Match Expenses of Rs 15,000 are not deductible from the Prize Fund. This is because the Prize Fund is maintained only to meet the expenses relating to the Prize. However, the match expenses (i.e. Rs 15,000) will be debited to the Income and Expenditure Account as there is no specific fund is maintained to meet such expenses.
Case 2
Balance Sheet
Liabilities
Amount
(Rs)
Assets
Amount
(Rs)
Match Fund
1,00,000
Match Fund Investments
60,000
Less: Match Expenses
(35,000)
Add: Interest on Match Fund Investments
3,000
68,000
Note: Prizes paid worth Rs 19,000 are not deductible from the Match fund because the Match Fund. This is because Match Fund is maintained only to meet the expenses relating to the Match. However, the prizes paid (i.e. Rs 19,000) will be debited to the Income and Expenditure Account as there is no specific fund is maintained for distributing the prizes. Also, the interest on Match Fund Investments is added to the Match Fund because it is an income related to this particular fund.
Case 1
|
Balance Sheet |
||||
|
Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
|
|
Prize Fund |
50,000 |
|
|
|
|
Less: Prize Paid |
(12,000) |
38,000 |
|
|
|
|
|
|
|
|
Note: Match Expenses of Rs 15,000 are not deductible from the Prize Fund. This is because the Prize Fund is maintained only to meet the expenses relating to the Prize. However, the match expenses (i.e. Rs 15,000) will be debited to the Income and Expenditure Account as there is no specific fund is maintained to meet such expenses.
Case 2
|
Balance Sheet |
||||
|
Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
|
|
Match Fund |
1,00,000 |
|
Match Fund Investments |
60,000 |
|
Less: Match Expenses |
(35,000) |
|
|
|
|
Add: Interest on Match Fund Investments |
3,000 |
68,000 |
|
|
|
|
|
|
|
|
Note: Prizes paid worth Rs 19,000 are not deductible from the Match fund because the Match Fund. This is because Match Fund is maintained only to meet the expenses relating to the Match. However, the prizes paid (i.e. Rs 19,000) will be debited to the Income and Expenditure Account as there is no specific fund is maintained for distributing the prizes. Also, the interest on Match Fund Investments is added to the Match Fund because it is an income related to this particular fund.
