Question

Select the most appropriate answers from the alternatives given below and rewrite the sentences.

‘Outstanding subscription’ at the end of Accounting year represents _____________.
a) a liability
b) an expenditure
c) an asset
d) a capital fund

Answer 1

‘Outstanding subscription’ at the end of Accounting year represents an asset.

Explanation: Subscriptions are the main source of income for an NPO. Outstanding subscription represents amount receivable on account of subscriptions. Such outstanding income at year-end is an asset and, therefore, shown on the Assets side of the Closing Balance Sheet (being closing balance of subscription).