Which of the following options given below are correct?

A. If there appears a sports fund, the expenses incurred on sports activities will be shown on the debit side of Income and Expenditure Account.
B. Donations for specific purposes are always capitalized.
C. Scholarships granted to students out of funds provided by Government will be debited to Income and Expenditure Account.
D. Opening balance sheet is prepared when the opening balance of capital fund is not given.
E. If donations received is to be utilised to achieve specified purpose, it is called Specific Donation.

Choose the correct answer from the options given below:

B, D, E only

The correct answer is option 2- B, D, E only.

A. If there appears a sports fund, the expenses incurred on sports activities will be shown on the debit side of Income and Expenditure Account- This is incorrect. The Not-for-Profit Organisations office create special funds for certain purposes/activities such as 'prize funds', 'match fund' and 'sports fund', etc. Such funds are invested in securities and the income earned on such investments is added to the respective fund, not credited to Income and Expenditure Account. Similarly, the expenses incurred on such specific purposes are also deducted from the special fund. For example, a club may maintain a special fund for sports activities. In such a situation, the interest income on sports fund investments is added to the sports fund and all expenses on sports deducted therefrom. The special funds are shown in balance sheet. However, if, after adjustment of income and expenses the balance in specific or special fund is negative, it is transferred to the debit side of the Income and Expenditure Account or adjusted as per prescribed directions.

B. Donations for specific purposes are always capitalized- This is correct. If donation received is to be utilised to achieve specified purpose, it is called Specific Donation. The specific purpose can be an extension of the existing building, construction of new computer laboratory, creation of a book bank, etc. Such donation is to be capitalised and shown on the liabilities side of the Balance Sheet irrespective of the fact whether the amount is big or small. The intention is to utilise the amount for the specified purpose only. 

C. Scholarships granted to students out of funds provided by Government will be debited to Income and Expenditure Account- This is incorrect. Scholarships are considered a distribution of funds rather than an expense, so they would not be directly debited to the Income and Expenditure Account. Instead, they may be deducted from the specific fund in the balance sheet.

D. Opening balance sheet is prepared when the opening balance of capital fund is not given- This is correct. If the opening balance of the capital fund is not provided, an opening balance sheet can be prepared to reflect the assets, liabilities, and equity position of the organization, allowing for a clearer financial picture.

E. If donations received is to be utilised to achieve specified purpose, it is called Specific Donation- This is correct. Donation is a sort of gift in cash or property received from some person or organisation. It appears on the receipts side of the Receipts and Payments Account. Donation can be for specific purposes or for general purposes.
(i) Specific Donations: If donation received is to be utilised to achieve specified purpose, it is called Specific Donation. The specific purpose can be an extension of the existing building, construction of new computer laboratory, creation of a book bank, etc. Such donation is to be capitalised and shown on the liabilities side of the Balance Sheet irrespective of the fact whether the amount is big or small. The intention is to utilise the amount for the specified purpose only.
(ii) General Donations: Such donations are to be utilised to promote the general purpose of the organisation. These are treated as revenue receipts as it is a regular source of income hence, it is taken to the income side of the Income and Expenditure Account of the current year.