Question

State how will be the prizes awarded of ₹ 5000 shown while preparing the final accounts of a club for the year ending on 31st march 2020

Answer 1

Answer:

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Explanation:

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.