Question

How would the following items be treated while preparing the financial
statements of a sports club?
Amount
Particulars
₹
Prize Fund
44,000
Interest on Prize Fund Investments
6,000
Prizes Awarded
46,000
Match Expenses
64,000
Prize Fund Investments
44,000​

Answer 1

Answer:

Note: Match Expenses of Rs 15,000 are not deductible from the Prize Fund. This is because the Prize Fund is maintained only to meet the expenses relating to the Prize. However, the match expenses (i.e. Rs 15,000) will be debited to the Income and Expenditure Account as there is no specific fund is maintained to meet such expenses

Answer 2

please refer to attachment hope it helped