Question

State whether the following statements are True or False.

Income and expenditure account, prepared by ‘Not for Profit’ concerns, must be accompanied by balance sheet.

Answer 1

True

Explanation: Income and Expenditure Account is prepared to ascertain the surplus earned/deficit incurred during the accounting year. On the other hand, Balance Sheet is prepared to depict the true financial position of business. Both Income and Expenditure Account and Balance Sheet form a part of the final accounts.