Accountancy, asked by guptaananya109, 11 months ago

10. Jaipur Club has a prize fund of * 6,00,000.
a prize fund of 6,00,000. It incurs expenses on prizes
amounting to 5,20,000. The expenses should be
(a) debited to income and expenditure account.
(b) presented on the asset side of the balance sheet.
(c) debited to income and expenditure account and present
and expenditure account and presented on the asset
side of the balance sheet.
(d) deducted from the prize fund on the liability side of the balance sheet.​

Answers

Answered by anmolgupta2614
11

b) Presented on asset side of the balance sheet

Answered by JackelineCasarez
4

The expenses should be deducted from the prize fund on the liability side of the balance sheet.​

Explanation:

  • Liabilities are defined as legal financial deb-ts or obli-gations of the company that arises during the operation of the business.
  • They are settled over time through the transfer of economic benefits, including money, goods, or services. Recorded to the right of the balance sheet, liabilities include loans, accounts payable, mort-gages, deferred revenue, and accrued expenses.
  • In the given situation, the prize fund is a liability and thus, any expenses pertaining to the amount/prize that is awarded would reduce the liability and therefore, it must be deducted from the liability side. Hence, option D is the correct answer.

Learn more: Balance sheet

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