Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C9 Accounts ol‘Non—trading Concerns2 Marks
Question
Write Short notes: $(1)$ Specific purpose fund:
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Answer
Donation or charity received for a specific purpose is used for that specific purposeonly. For ex, building fund, president felicitation fund, prize fund, Etc.
$(i)$ As and when any expense is incurred in this regard, it is not disclosed in theincome and expenditure account, but it is deducted from the respective fund accounton the liability side of the balance sheet.
$(ii)$ The expense is disclosed by deductingit from the related fund. e.g. If prize fund is received, then prize expense is disclosedby deducting it from the prize fund.
$(iii)$ In this type of fund amount invested insecurities then investment amount is shown of asset side of Balance sheet and interestOn investment is shown on liabilities side of balance sheet.
$(iv)$ In specific purposefund, the more expense amount compare to fund, it is calculate as revenue expense and recorded on the debit side of income-expenditure account.
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