Read the following information provided by a school and attempt Question:
The Trial Balance of a school as on 31.3.2017 is
|
Debit Balance |
Amount (₹) |
Credit Balance |
Amount (₹) |
|
Building |
6,25,000 |
Admission fees |
12,500 |
|
Furniture |
50,000 |
Tuition fees received |
5,00,000 |
|
Library books |
1,50,000 |
Creditors for supplies |
15,000 |
|
Investment @12% (1.4.16) |
5,00,000 |
Rent for the school hall |
10,000 |
|
Salaries |
5,00,000 |
Miscellaneous receipts |
30,000 |
|
Stationery |
40,000 |
Legacies (general) |
3,50,000 |
|
General expenses |
18,000 |
General fund |
10,00,000 |
|
Sports expenses |
15,000 |
Donation for library books |
62,500 |
|
Cash at bank |
1,00,000 |
Sale of old furniture |
20,000 |
|
Cash in hand |
2,000 |
|
|
|
|
20,00,000 |
|
20,00,000 |
Additional Information:
The book value of the furniture sold was ₹50,000 on April 1, 2016 was sold for ₹20,000.
Excess of Sports Expenses over Sports Funds will be:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debited to Income and Expenditure A/c
A sports fund is a special fund. Expenses on sports are first deducted from the fund itself, not charged to the Income and Expenditure Account. When the sports expenses are more than the fund, the fund cannot meet the extra amount. This excess is a revenue expense of the year, so it is taken to the debit side of the Income and Expenditure Account.
Option (2) Credited to Income and Expenditure A/c — Incorrect. An excess of expenses is a charge that lowers the surplus; only incomes are credited.
Option (3) Shown on Assets side — Incorrect. The excess is money already spent; it brings no future benefit and is not an asset.
Option (4) Shown as Negative balance on Liabilities side — Incorrect. A fund is not left with a negative balance; the shortfall is cleared through the Income and Expenditure Account.
Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), and it is also out of the CUET 2026 syllabus.
NCERT (Pre-rationalised edition): NCERT (Pre-rationalised edition): |