Question

how is the outstanding interest on general fund investment 5,000 treated in the financial statement of a not for profit organisation

Answer 1

Answer: ₹5000 will be added as accrued interest on assets side of balance sheet as well as they will be added in the income sides of Income and expenditure account.

Refer the image below

Answer 2

The general fund outstanding interest will be shown on the income side of the financial statement of a not for profit organization.

Explanation:

• Interest from the fund is earned on the investment so, the interest is received on general funds will be shown alongside the fund, but in this question, they have not specified the amount of the fund, so we will assume that the fund isn’t given.
• The interest will be recorded under the income side of the income & expenditure account and if needed to make balance sheet must be shown in the asset side.
• The outstanding interest can also be treated as accrued interest.