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Why do munici...

Question

Why do municipal grants come in the income and expenditure a/c ? (with reference to Q34 Pg 20.60 in TS Grewal) To my knowledge municipal grants have a specific purpose and grants with a specific purpose come in the Balance Sheet.

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Solution

Dear Student, Municipal Grants are revenue receipts. These are not Special Aids. Therefore, these are shown on the Income Side of Income and Expenditure Account.

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