If a small amount is received as specific donation the __________.

it is shown on the liabilities side of the balance sheet

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it is shown by way of deduction in capital fund in liability side of the balance sheet

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it is treated as income and credited to income and expenditure account

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None of the above

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Solution

The correct option is A it is shown on the liabilities side of the balance sheet
b"Donation received for specific purpose is capital receipt. Specific donation can't be used for any other purpose than the purpose for which it is given. It creates a liability for Not for Profit Organisation. That's why It is shown on the liabilities side of the balance sheet. "

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