Read the following information and answer the questions.

ABC Welfare Society is working on the construction of building (sports complex for indoor games). It has provided the following information on 1st April, 2020.

Capital fund = ₹6,50,000
Building fund = ₹7,00,000
Donation received for building = ₹5,00,000
Poor girls marriage fund = ₹2,00,000
Sports fund = ₹1,00,000
At the end of the year, building is completed by incurring ₹15,00,000.
Expenses on sports ₹60,000
Expenses on Poor girls marriage= ₹1,30,000

At the end of the year society closed the poor girls marriage fund.

What treatment will be given to the sports fund?

Balance ₹40,000 will continue as liability

The correct answer is option 1- Balance ₹40,000 will continue as liability.

Sports fund opening balance = 1,00,000
Less: expenses = 60,000
Closing balance = 40,000

Closing balance will be shown on the liability side of balance sheet.