State the accounting treatment of grant received by a Charitable Hospital:

Credited to Income & Expenditure Account

The correct answer is Option (1) - Credited to Income & Expenditure Account.

Grant received is a revenue income so it is credited to the income and expenditure account.

In the case of charitable organizations like hospitals, grants received are treated as income. These grants are typically not treated as liabilities because they are not owed to anyone. Instead, they are recognized as income and credited to the Income & Expenditure Account. This account is used to record the revenues and expenses of a non-profit organization. When a charitable hospital receives a grant, it is treated as income, and thus, it is credited to this account.