State the accounting treatment of Endowment Fund in financial statement of a public hospital.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Shown on Liabilities side of Balance sheet
Endowment Fund is a fund arising from a bequest or gift, the income of which is devoted for a specific purpose. Hence, it is a capital receipt and shown on the Liabilities side of the Balance Sheet as an item of a specific purpose fund.