Calculate prize fund expenses incurred during the year 2021-22 from the following information
Prize fund as on 1 April, 2021 Rs. 80,000
Donation received for Prize Fund Rs. 15,000
10% Prize Fund Investment Rs. 80,000
Interest Received Rs. 5,000
Interest Accrued Rs. 3,000
Prize fund as on 31 March, 2022 Rs. 70,000
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 33,000
A prize fund is a special fund: the income from its investments is added to the fund, and the prizes are paid out of it. The balance left at the end is the closing fund, so the expenses are the balancing figure.
Prize fund on 1 April 2021 = Rs. 80,000
Add: donation for prize fund = Rs. 15,000
Add: interest on prize fund investments (Rs. 5,000 received + Rs. 3,000 accrued) = Rs. 8,000
Total = Rs. 1,03,000
Less: prize fund on 31 March 2022 = Rs. 70,000
Prize fund expenses = Rs. 33,000
The interest of Rs. 8,000 is 10% of the Rs. 80,000 investment, so the accrued part must be included along with the cash received.
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): NCERT (Pre-rationalised edition):
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