Question

What is Capital Fund?

Answer 1

Answer:

In case of Not-for-profit organisation, Capital fund can be considered as excess of its assets over its liabilities. Any surplus or deficit ascertained from Income and Expenditure account is added to (deducted from ) the capital fund. This is termed as Accumulated Fund.

Calculation of Capital Fund

Capital Fund at the beginning of the year

(+) Surplus from Income and Expenditure Account

(Through b/f)

(+) Subscription Amount (Capitalised Amount )

(+) Life membership fee.

(-) Deficit from Income and Expenditure Account

(Through b/f)

Capital Fund at the end of the year

Answer 2

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Capital Funds are those funds which are kept aside for the purchase of assets like land, equipment etc. These funds are maintained out of the surplus made by an organisation. 

The formula used to calculate Capital Fund in the Opening Balance sheet is -

Capital Fund = Total Assets - Total Liabilities

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