Accountancy Part AAccounts for Non Profit Organsiation

Identify the term that is used to show the amount received as per the…

Identify the term that is used to show the amount received as per the will of a deceased person.

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Legacies

A legacy is money a not-for-profit organisation receives under the will of a person who has died. If the will names its use it is a specific legacy (a liability in the balance sheet); otherwise it is revenue.

Why the other options are incorrect

Option (1) Specific Donations — Incorrect. These are gifts by living donors for a stated purpose, not amounts under a will.
Option (2) Life membership fees — Incorrect. These are lump sums paid by members in place of yearly subscription.
Option (3) Subscription — Incorrect. It is the regular periodic fee paid by members.

Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.

NCERT (Pre-rationalised edition):
Legacies – “It is the amount received as per the will of a deceased person who may or may not specify the use of the amount. Legacies, use of which is specified are specific legacy and is shown in the balance sheet as liability. If the use is not specified it is considered as revenue nature and credited to income and expenditure account.”