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Financial Statements - 1 — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountFinancial Statements - 11 Mark
MCQ
Donation received for a specific purpose should $......$
  • ✓
    Be credited to a separate account and shown on the liabilities side of the balance sheet.
  • B
    Be credited to income and expenditure account.
  • C
    Not be recorded at all.
  • D
    Be debited to income and expenditure account.
✓

Answer

Correct option: A.
Be credited to a separate account and shown on the liabilities side of the balance sheet.

Donation received for a specific purpose is to be utilized for the specific activity. This kind of donations are capital receipts and to recorded separatly. It should be kept in a separate account and expense to be reduced from this account only. Balance of this account to be shown as liability in the balance sheet.

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