Income and Expenditure A/c includes :

(A) Interest on Investment
(B) Consumable items
(C) Depreciation
(D) Life membership fees
(E) Donation (specific)

Choose the correct answer from the options given below :

(A), (B) and (C) Only

The correct answer is Option (1) - (A), (B) and (C) Only.

(A) Interest on Investment- It is shown in income and expenditure account. Interest on investment is an income of the organisation so it is shown on the credit side of the account.

(B) Consumable items- It is shown in income and expenditure account. Consumable items are used by the organisation during the year so consumable part is shown on the debit side of account.

(C) Depreciation- It is shown in income and expenditure account. Depreciation is a non cash item but it an expense for the organisation so it is shown on the debit side of the account.

(D) Life membership fees- It is shown in balance sheet. It is also a common practice to add some of the capitalised items like legacies, entrance fees and life membership fees directly in the capital fund in the balance sheet.

(E) Donation (specific)- It is shown in balance sheet. 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.