Question

Fund Based Accounting
7. State how will be the prizes awarded of 5,000 shown while preparing the final accounts of a club for the
year ending on 31st March, 2020.
following items presented in financial statements of a Not-for-profit organisation?​

Answer 1

The prize award is treated as a liability in the balance sheet.

• The prize award of Rs 5000 will be deducted from the prize fund. Prize fund is a particular fund that has to be shown as liability.

• Any expenses that apply to the awarded money, must be moved to the  liabilities side in a balance sheet by deducting the sum from the fund account.

• Whereas, in the income and expenditure account it will be treated as an expenditure.

Answer 2

Answer:

prizes awarded of rs 50000 will be shown in the debit side of ( expenditure side of income and expenditure account .

Explanation: just make a table of debit side only