(Accounting for Not-for-Profit Organizations, Partnership Firms and Companies)
Subscription received by a school for organizing annual function is treated as:
a) Capital Receipt
b) Revenue Receipt c) Asset
d) Earned Inco
Apand care partners in a firm sharing profit/locc in the ratio of 2.2.1 . M
UL21 410
Answers
ans: (b) Revenue Receipt.
Answer:
Correct option: B
Revenue Receipt
Accounting for Not-for-Profit Organizations, Partnership Firms and Companies) Subscription received by a school for organizing annual function is treated as Revenue Receipt.
Explanation:
Revenue receipts are defined as those that do not result in a liability for the government or a reduction in its assets. They are of a regular and recurring nature, and the government receives them as part of its normal operations. The proceeds from the Centre's taxes and other duties, as well as the interest and dividends it receives on its investments and the fees and charges it receives for its services, are all included in revenue receipts.
Revenue receipts must meet two requirements:
No liability: The government does not incur any liability as a result of revenue receipts. Taxes, for example, do not create any liabilities for the government, unlike borrowings.
No asset reduction: There is no reduction in the government's assets as a result of revenue receipts. As a result, the government cannot show revenue receipts from the sale of a stake in a public-sector undertaking because the stake sale reduced the government's assets.