Question

Explain the accounting treatment of specific donation in case of not for profit organization.

Answer 1

Treatment of donation

Any donation received in the form of a non-cash asset should be credited to the particular fund for which the asset has been donated. In case of absence of such particular fund, the amount should be credited to the capital fund account.

Answer 2

ANSWER ♥️

Any donation received in the form of a non-cash asset should be credited to the particular fund for which the asset has been donated. In case of absence of such particular fund, the amount should be credited to the capital fund account.

The amount of general donation is an income and we credit it to Income and Expenditure Account. Specific Donation: In case the donor specifies the purpose for which the donation should be used, it is a Specific Donation. For example, a donor donates ₹ 10,00,000 for the library.

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