How the following item will be treated in financial statements of Not-for-Profit Organisation?
Receipts from charity show: ₹12,000
Expenses on charity show: ₹9,000
Answer & explanation
Correct answer: option 2
The correct answer is Option 2 - ₹3,000 shown on credit side of Income and Expenditure A/c.
Receipts from charity show (₹12,000) - Expenses on charity show (₹9,000)
= ₹3,000.
Receipt are more than expense so it is credited to the income & expenditure account.