Question

 Anand has instituted a Sports Fund of Rs.100,000 in a school. The school kept the funds in a separate Bank Account out of which it withdrew money every year and spent it on the sports activities. The fund had a balance of Rs.15,000 as on 31st March, 2017. During the financial year ended 31st March, 2018, it spent Rs.17,500 in organizing the sports events.

How will you account the expense? Give reasons for your answer.      ​

Answer 1

Answer:

In year end sports fund balance is 15000

and expenses on sports is 17500

expenses are more than fund so expenses for 17500 are not fully covered from fund

so balance expense 17500-15000=2500is shoeb on debit side of income and expenditure account

Reason

sport fund is particular fund and utilise for only sport expenses

when sport expense not fully covered from fund then remaining expense are covered from another income