Accountancy Part AAccounts for Non Profit Organsiation

If there appears a Tournament Fund, then the expenses incurred on Tou…

If there appears a Tournament Fund, then the expenses incurred on Tournament activities will be shown:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → By way of subtracting/deducting from Tournament Fund

A Tournament Fund is a special fund kept for one activity. Expenses on that activity are deducted from the fund in the balance sheet and do not go to the Income and Expenditure Account; only a shortfall beyond the fund is charged there.

Why the other options are incorrect

Option (1) On the debit side of Income and Expenditure Account — Incorrect. That applies only when there is no specific fund.
Option (2) On the credit side of Income and Expenditure Account — Incorrect. An expense is never credited as income.
Option (3) By way of adding to the Tournament Fund — Incorrect. Income of the fund is added; expenses reduce it.

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):
Special Funds – “The Not-for-Profit Organisations office create special funds for certain purposes/activities such as 'prize funds', 'match fund' and 'sports fund', etc. Such funds are invested in securities and the income earned on such investments is added to the respective fund, not credited to Income and Expenditure Account. Similarly, the expenses incurred on such specific purposes are also deducted from the special fund.”