Accountancy Part AAccounts for Non Profit Organsiation

Honorarium paid for guest lecture by a Not-for-profit organisation is…

Honorarium paid for guest lecture by a Not-for-profit organisation is shown in:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Income & Expenditure A/c

Honorarium is paid to a person who is not a regular employee, for example a guest lecturer. It is a revenue expense of the year and goes to the expenditure side of the Income and Expenditure Account.

Option (1) Capital fund — Incorrect. Only the surplus or deficit and capitalised receipts are taken to the capital fund, not individual expenses.

Option (2) Balance sheet — Incorrect. A paid revenue expense leaves nothing to show as an asset or liability.

Option (3) Profit & loss A/c — Incorrect. A Not-for-Profit Organisation prepares an Income and Expenditure Account in place of a Profit and Loss Account.

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):
Some Peculiar Items – “… Honorarium: It is the amount paid to the person who is not the regular employee of the institution. Payment to an artist for giving performance at the club is an example of honorarium. This payment of honorarium is shown on the expenditure side of the Income and Expenditure Account.”