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Question

Life membership fee is a ________________.

A
Revenue nature receipt
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B
Capital nature receipt
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C
Revenue nature expenditure
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D
Capital nature expenditure
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Solution

The correct option is D Capital nature receipt
Life Membership Fees is a capital receipt and we add it to the Capital Fund on the liabilities side of the Balance Sheet. We do not account it as an income because a life member makes onetime payment and avails services all through his life.

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