Surplus revealed by income and expenditure account ___________________.

is shown as deduction in accumulated fund at the balance sheet

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is transferred to an account called capital fund

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distrusted among the members of the non-profit organization

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must be donated to other non-profit organization.

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Solution

The correct option is B is transferred to an account called capital fund
The following are the features of income and expenditure account:
It is prepared on an accrual basis.
It records all cash and non-cash expenses and incomes, which are revenue nature.
It is debited with the expenses and losses and credited with incomes and gains.
The closing balance of income and expenditure account either surplus or deficit is transferred to the capital fund in the balance sheet

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(II) The difference at Dr. side of Receipt & Payment A/c account is known as surplus or deficit and deducted from capital fund.
(III) Income & Expenditure A/c is always accompanied by balance sheet.
(IV) Going concern assumption is not relevant for accounting of non-profit organization.
Select the correct answer from the options given below.

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