| | | | + income and Expenditure Account: feat ‘ he features, preparation of : ey income and expenditure account and balance sheet from the + Not-for-profit organizations: concept. + Receipts and Payments Account: features and prepare are receipts and payments account with additional _ Information. Scope: i Adjustments in a question should not exceed 3 or 4 in number {and restricted to subscriptions, consumption of consumables ‘and sale of assets/ old material fi Entrance/admission fees and general donations are to be treated a5 revenue receipts. iit Trading Account of incidental activities is not to be prepared. Unit : Accounting for Partnership Firms t Units/Topics ‘Accounting for Partnership firms - Reconstitution and Dissolution. “| Retirement and death of a partner: effect of retirement / death fa partner on change in profit sharing ratio treatment of {goodwill treatment for revaluation of assets and seesessrnent of liabilities, adjustment of accumulated profs and reserves and preparation of balance sheet. «Calculation of deceased partners share of proft til he date ofdeath, iscalaton ofa partnership armimeaning of dissolution of i nips olution of a frm. partnership and partnership firm types of dissolution Settlement of accounts - preparation of realization account, and Unit : Accounting for Not - For Profit Organisations seta accounts: exptteccounts of partners and cere sack al xclding plecereal dstbution salet02 company and insolvency of partner(s), Learning Outcomes After going through t able to: ‘+ State the meaning of a Notfor-profit organisation, ‘and its distinction froma profit making entity. ‘+ State the meaning of receipts and payments account, and understanding its features. + Develop the understanding and skill of preparing receipts and payments account. + State the meaning of income and expenditure ‘account and understand its features. + Develop the understanding and skill of preparing income and expenditure account and balance sheet fof a not-for-profit organisation with the help of civen receipts and payments account and additional information, Unit, the students will be Learning Outcomes After going through this Unit, the students will be ableto: + Explain the effect of retirement / death of a partner ‘on change in profit sharing ratio. + Develop the understanding of accounting treatment ‘of goodwill, revaluation of assets and re-assessment of liabilities and adjustment of accumulated profits land reserves on retirement / death of a partner. + Develop the skill of calculation of deceased partner's share tl the time of his death, «+ Discuss the preparation of the capit the remaining partners and the balance sheet firm after retirement / death ofa partner. al accounts of ‘ofthe ce seaurNote: 1 Ifrealized value of an asset isnot given tis to be presumed that ithas not realised any amount. ‘Ifa partner has borne and/or paid the realisation expenses, it should be stated. ‘+ Understand the situations under which a partnership firm can be dissolved, ‘+ Develop the understanding of preparation of realisation account and other related accounts, Unit : Accounting for Companies oe Units/Topics ‘Accounting for Debentures + Debentures: sue of debentures at par ata premium and ata discount. Issue of debentures for consideration other than ‘ash Issue of debentures with terms of redemption, debentires as colateral security concept, interest on debentures. Wrting off discount /loss on isue of debentures, none, 2 Discount or os on issue of debentures to be writen offin the year debentures are allotted from Security Premium Reserve/ Capital, Reserve/ Statement of Profit and Loss as Financial Cost (AS 16) in that order Note: Aelated sections ofthe Companies Act. 2013 wil apply. Concept of Tox Deducted at Source (TDS is excluded. Learning Outcomes After going through this Unit, the students will beable to: * Explain the accounting treatment of different ‘categories of transactions related to issue of debentures. Develop the understanding and skill of writing of discount /loss on issue of debentures, Understand the concept of collateral security and its presentation in balance sheet. Develop the skill of calculating interest on. debentures and its accounting treatment, State the meaning of redemption of debentures. Unit : Analysis of Fini ncial Statements ee Financial statements of a Company: * Tools: for Financial: Statement Anal Conse trans 1g Outcomes After going through this Unit, the students will be able to: Develop the understanding and skill of preparation ‘of comparative and common size financial statements.Unit : Cash Flow Statement Units/Topics Learning Outcomes ‘+ Meaning, objectives and preparation [as per AS 3 (Revised)] ‘After going through this Unit, the students will be (Indirect Method only) ableto: Note: + State the meaning and objectives of i. Adjustments relating to depreciation and amortization, profit or cash flow statement, lesson sale of assets including investments, dividend (both inal | * Develop the understanding of preparation of Cash _ and interim) and tax. Flow Statement using indirect method as per AS 3 iBank overdraft and cash credit to be treated as short with given adjustments. term borrowings. iil Current Investments to be taken as Marketable securities tunless otherwise specified. ‘Note : Previous years’ Proposed Dividend to be given effect, as prescribed in AS-4, Events occurring after the Balance Sheet date. Current years’ Proposed Dividend will be accounted for in the next year after its declared by the shareholders. Lak PROJECT WORK ‘Students would prepare only ONE project in the entire academic session, whichis divided into two terms ie. Term =| and Term =ICBSE Term II Accountancy XI PART AFinancial Statements of Not-for-Profit Organisations In this Chapter... # Introduction # Receipts and Payments Account Income and Expenditure Account * Balonce Sheet Not-for-profit Organisations (NPO) , also known as non-profit organisations, refer to those organisations that are set-up for the welfare of the society and are set-up as charitable institutions which fimetion without any profit motive. jon-profit organisations are separate legal entity not owned by any individual or an enterprise. Examples of non-profit organisations are clubs, hospitals, ibraries, schools, societies for promotion of sports, arts and culture, ete. \ccounting Records of Not-for-Profit Organisations The main aim of these organisations is not to earn profit. Therefore, they do not prepare trading and profit and loss Account, But they are also required to maintain proper accounts and prepare financial statements to meet the statutory and to exercise proper control over the utilisation of their funds. The final accounts of non-profit- irement (It records cash receipts and cash payments) (Ltrecords income and expenditure ofa particular year) cial position of the organisation) ‘and incomes relating to a particular fund are credited to that particular fund and to that particular fund, is known as fund based accounting. ‘eg. prize fund, sports fund, library fund, building fund, endowment tis shown in the balance sheet on the liabilities side, Ifthe fund itis transferred to the debit of income and for specific purposes. find, ete. If the fund account has a credit balance, focount has a debit balance, ic. the fund i less than the balance, penditure account. cation of Funds Funds may be classified as nrestricted funds + Restricted funds types of restricted funds are as follows (b) Annuity fund (c) Loan fund (4) Fixed assets fund (e) Prize fund I7 CBSE Terrmll | Accountancy x cB! Receipts and Payments Account ‘The receipts and payments account is the summary of cash and bank transactions which helps in the preparation of income and expenditure necount. tis prepared a the end ofthe accounting period and fs a summary of cash book, classifying receipts and payments under various heads along with eash and bank balances in the beginning and atthe end of the accounting period. Receipts are recorded on the debit side and payments are recorded on the credit side of the account. The account is maintained on eaish basis of accounting. Every receipt and payment, whether capital or revenue irrespective of the period, is recorded in this account. The purpose of preparing this account is to ascertain cash in hand and cash at bank at the end of the year. Features of Receipts and Payments Account Following are the features of receipts and payments account 1. Nature Receipts and payments account is a real account in nature. It is basically a summary of the cash book, 2, Period In this account, all receipts and payments irrespective of the period to which they pertain, are shown, In 3. Capital and Revenue All cash receipts and cash payments whether of capital nature or of revenue nature are included. Iti 4, Distinction No distinction is made in receipts/payments, made in cash or through bank. With the exception of am the opening and closing balances, the total amount of each receipt and payment is shown in this account. Tis 5. Adjustment of Non-cash Items Non-cash items such as depreciation, outstanding expenses, accrued income, the ete., are not shown in this account. ont 6. Opening and Closing Balance It begins with opening balance of cash in hand and cash at bank (or bank Itsl overdraft) and closes with the year end balance of cash in hand/cash at bank (or bank overdraft). exp fee Format of Receipts and Payments Account Fe Receipts and Payments Account Fol Dr for the year ended .. Cr 1 Receipts, Amt (| Payments [ame @) 2. ‘To Balance b/d (Opening balance) By Balance b/d (Opening) 3. Cash in Hand . (In case of bank overdraft) Cashat Bank Revenue Payments 4 Revenue Receipts By Salaries 5 To Subscriptions (Present, pastand future) By Rent : To Entrance Fees (in recurring nature) By Postage Expenses 6 To General Donations By Advertisement Expenses ‘To Locker’ Rent By Newspapers and Magazines, et To General Grants. se By Repairs To Sale of Newspapers, Grass, ete. By Audit Fee. . Fo To Interest on Investments f By Entertainment Expenses ‘To Sale of Old Used Sports Materials By Maintenance Expenses ‘To Proceeds from Entertainment By Insurance To Income from Concerts Lectures By Secretary's Honorarium TorReccips fom show By Lecturers Honovaium To Dividends) By Municipal Tax To Rent By Gardening To Interest By Prize Distributed To Miscellaneous Receipts By Office Expenses Capital Receipts By Expenses on Show Toile Membership Fees By Miscellaneous Payments To Subscriptions for Specifle Purpose Capital Payment To Donation for Specific Purpose By Purchase of Fised Assets (cg. Fumiture)CBSE Term-ll | Accountancy Xil Receipts ‘To Grant for Specific — = ® a on To Entrance Fees (Non-recurring) eae ‘To Legacies cree ‘To Endowment Fund By ae ToSaloct Ped Ast * | Spsatane Cowen To Receipts on Account of Special Fur lance (Closing ieMachtwnd Pietiniee |. | oamicnee ea To Balance e/a (closing) atm (in case of bank overdraft) : ae Income and Expenditure Account is the summary of income and expendi in expenditure for the accounting year. It is « nominal aecount in nature and pose as the profit and loss account ofa business organisation does. veel Brepared at the end of accounting period to ascertain the net operating results. ll the revenue items relating to iirrent period are shown in this account, the expenses and losses on the expenditure side and incomes and gains e income side of the account. the net operating result in the form of surplus (ie excess of income over expenditure) or deficit (Le. excoss of diture over income) which is transferred to the capital fund shown in the balance sheet. Its prepared on the tures of Income and Expenditure Account Capital Items No capital items are entered in this account. it and Credit Sides Its debit side includes all the expenses pertaining to the particular period and credit includes all the incomes pertaining to the same period. pening and Closing Balances No opening and closing balances are recorded in it. hly Current Period Items No item, either revenue or expenditure, pertaining to the past period or the future eriod is entered in this account. Inllar to Profit and Loss Account This account is prepared in the same manner in which a profit and loss ntis prepared. alus/Deficit Credit balance is called excess of income over expenditure, ture over income, Le. deficit. i.e. surplus and debit balance is Excess of exp ‘Format of Inco! ndjExpenditure Account g Income and Expenditure Account for the year ending . ‘Amt (2) Income ‘Amt By Subscriptions (+) Outstanding at the End (+) Advance in the Beginning () Outstanding in the Beginning, (J) Advance at the End (es) By Entrance Fees (Only that amount which is treated as revenue) [By DonationsCBSE Terrmil | Accountancy xy Expenditure [ Amt) Income ‘Amt @ To Telephone Expenses o of Old Newspapers = ‘To Repairs By Hall Rent To Depreciation on Building By Sundry Receipts To Sports Material Used By Deficit (Excess of Expenditure To Surplus (Excess of Income over over Income)" Expenditure)® |—___ “Either of the two will aopear. Balance Sheet It is prepared by not-for-profit organisations to ascertain the finaneial position of the organisation. It is prepared on the same pattern as that of the business entities. Balance sheet is prepared at the end of the accounting period after preparing income and expenditure account. Sometimes, balance sheet needs to be prepared at the beginning of the year in order to find out the opening balance of the capital/general hand side along with capital fund or general fund. nd. The balance sheet shows assets on the right hand side and liabilities are shown on the left The capital fund or general fund is in place of the capital and the surplus or deficit as per income and expenditure account, shall be added to/deducted from this fund. Format of Balance Sheet Balance Sheet as at... Liabilities Amt (@) Assets Amt (3) Capital Fund Fixed Assets ‘Opening Balance Building (+) Surplus for(~) Defi Opening Balance j (+) Additions (+) Entrance Fees (Capitalised amount) (~) Depreciation (a) Building Fund Furniture ‘Opening Balance Opening Balance (+) Donation for Bi (+) Additions Income from Building Fund rf () Depreciation () Investments Sale ed! Sports Fund a Current Assets Opening Balance Cash in Hand (+) Donation for Sports Fund Cash at Bank Interest on Sports Fund. 2. Subscriptions in Arrear Investments = Acerued Interest “ ioe Investments - (-) Sports Prize Awarded Building Fund Investments Current Liabilities © Sports Fund Investments Prepaid Expenses Insurance RentCBSE Term-Il | Accountancy XII Important Items Relating to NPO Subscriptions It is the membershi members on annual basis. It is the main source of income of bership fee paid by the annual It f incor non-profit organisations. Subseri rE uiecncee aca lating to the eurrent year whether received or no, are shown in he Subscriptions not received, i.e. ube -eived, i.e., outstanding are shown on the assets teccved in advance rth allowing youre Sawa on he dls sie of aace shel Table Showing Calculation of Subscriptions Particulars’ Subscriptions received during the year Sabserptions recive ding the year wheter a ees ‘of previous, current or future period) as (+) Subscriptions outstanding at the end of the year Subseriptions received in advance inthe begining ofthe year (©). Subscriptions outstanding in the beginning ofthe year Subscriptions received in advance at the end of the year Subscriptions to be Shown in the Income and Expenditure Account 2, Donations Donations are often received by charitable institutions. It is a sort of rift in cash or property received from some person or organisation. Donation can be for specific nitposee or general phi {@) Specifie Donation When the donations received ate tobe utilised for «specifi purpose sy. extras) ofthe existing building, construction of a new computer laboratory, creation ‘ofa book bank, ete itis called sp saaetfon. Tt should be capitalised and shown onthe liabilities side ofa balance sheet (ii) General Donation ‘When donations are utilised to promote the general purpose of the organisation, they are called as general donations. They are treated as toe rccelpt ast iva rear Miuvce af income Tt Hosen onthe income side of the income and expenditure account ofthe current Yet 3, Legacies The amount received by a non-profit organisation fe the will of a deceased person is termed as legacy: It is treated as a capital receipt and shown on the liabilities side. However, legacies of small amount may Tete ted as income and shown on the income side of the income ‘and expenditure account. 4 Bnteance Fees Entrance fee, also known as admission fee, is paid only once by the member atthe time of becoming a member. As entrance fee is paid by & ior box only once, iti argued that it should be treated a 5 capital receipt and transferred to capital a tHomever, it should be treated as revenue receipt and credited to epi me and expenditure account, when the moun) ‘small to cover the expenses of admission. 5. Life Membership Fees When Iumpsum amount paid by the members instead of paying period subscription, itis termed as Hie membership fees. It is treated as & capital receipt and added to the capital fund/general fand toa the liabilities side of a balance sheet 6, ale of Old Assets Book value of an asset iS ceradited tothe asset account. Any profit onsale of an assets Sredited and any loss on sale of an asset 5 ‘ebited to income and expenditure account 7. Sale of Periodicals It is an item of recurring nature and shown on the credit side of ineome and expenditure 8, Sale of Sports Material Sports materials ‘e alls, bats, nets, ete) is the ‘regular feature with any and expenditure account. shalt cari mnorarium is the amount paid to the person who is not an employee o.Pamen of Herc aah sone LO sje 10. Ende t Fund It is @ fund arising, from a bequest or ft, the income of which is eet se enka pa Nowe He ig a capital receipt ‘and shown on the liabilities ‘side of the balance sheet & ific purpose fund. ait “sient os oa ac ints Various institutions like schools, colleges, publ < hospitals, ete depe ‘ay oe & sa i 7 toe thed a stivities. Grants which are recurring in nature ‘are treated as revenue ret oa guts bel tue account, HOWwEVeE BraMts me pital nature such as building sm ‘ding account. receipt and transferred building are consumable assets. Sale of sports ‘material (used materials like old Sport club, 1¢ i usualy shown as an income 2 the income ———12. 13, 4, 1s. 16. a. 18. Preparation of Income and Expendi CBSE Term-II | Accountancy Xil Special Funds Certain special funds are created for certain purposes/activities, e.g. prize funds, match fund, | sports fund, ete. The income earned from such funds is added to the respective fund and not credited to income and expenditure account and also the expenses incurred on such specific purposes are also deducted from the special fund. Special Receipts When there is a receipt of amount by non-profit organisations for special occasions, it is referred to as special receipts, Such amounts are credited to a separate account and expenses against these receipts are debited to it. The balance is transferred to the credit side of income and expenditure account. Sale of Old Newspapers Amount which is realised by selling of old newspapers is treated as income and credited to income and expenditure account. Revenue Receipts Revenue reecipts are shown on the credit side of income and expenditure account, e.g, rent, interest on investment, proceeds from concerts, shows, ete. Revenue Expenses Revenue expenses are incurred for performing day-to-day activities or expenses which are recurring in nature, e.g, salary, rent, ete. It also includes expenses incurred on the maintenance of fixed assets, e.g, repairs, depreciation, etc. Capital Expenditures Capital expenditures are shown on the assets side of balance sheet, e.g. expenditure on purchase of books, furniture, investments, building, ete. Calculation of the Cost of Consumable Goods Consumable goods are the items which are consumed during the year such as stationery, sports material, foodstuff, medicines, postage, ete. Non-profit organisations have stock of consumable goods at the end of the year: The income and expenditure account will show correct surplus/defict, only if the goods consumed are debited to income and expenditure account and closing stock is shown in the balance sheet. The amount of goods consumed during the year is calculated as follows Particulars Amt (@) Opening Stock of Consumable Goods (+) Purchases During the Year (J) Closing Stock Balance (Itis to be shown in the Incom and Expenditure Account) Ire Account and Balance Sheet from Receipts and Payments Account with Additional Information Step 1 Prepare the opening balance sheet to find out the opening balance of capital fund (in case itis not given), ‘count and other the taking into aecount the opening cash and bank balances given in receipts and payments 2 assets and liabilities given in additional information. The difference between the assets and lial capital fund or general fund or accumulated fund. lities Step 2 Identify from the receipts side, ie. debit side ofthe receipts and payments account, the revenue receipts and Step 3 Step 4 There are certain items which d the capital receipts. * Capital receipts are shown in the appropriate assets and liabilities account and then incorporated in the balance sheet. « Record the revenue receipts on the income side, i.e. credit side of income and expen suitable adjustments so that all revenue receipts for the current year are shown, From the receipts and payments account, identify the revenue and capital payments from the payments side, i.e. credit side. + Capital payments are shown in the appropriate assets and liabilities account and then incorporated in the balance wre account, after making sheet. ‘+ Record the revenue payments on the expenditure side, ie. debit side of the income and expenditure account, for the current year after making necessary adjustments. not appear in receipts and payments account but are to be recorded in income and expenditure aecount. They are depreciation on fied assets-it is to be shown on the debit side, loss on sale of fixed assets-to be shown on the del le, profit on sale of fixed assets—to be shown on the credit side.CBSE Term-Il | Accountancy xi Step 5. Surplus/Deficit in the ineome in the balance sheet, Excess of and expenditure account is calcul de tis caloulated and transferred to the eapital fund shown income over expenditure is surplus and excess of expenditure over inco Step 6 Prepare closing balance sheet by taki a sheet by taking into considerat y capital fund, surpluidefiets purchase sad sale of std rng ‘assets during the ye g balance of assets, Solved Examples Example 1. From the following information of oso Waicinents ofthe Gah rs year onied GoStats Oa ee bilities and opening a Partie Match expenses (paid d ear, 2020-20 an aid ding the year, 2020-2021 Match funds at st Mare, 203 : no Donation for ath und reccved during the yea, 09021) 0 its from the sale of match tickets (received during the year, 2020-2021) 3:00 Ans. Dr Match Funel Aecount cr Particulars JF] Amt @ Par [or [Ame ® To Match Expenses 30,000 By Balance bid [ 17,000 By Donation for Match Fund 9,000 By Receipts from Sale of Match Tickets By Income and Expenditure Ale 30,000 | LE Note Expenses on account of match exc income and expenditure account ‘eed the balance in match fund by 1,000. This amount wll be debited 0 Example 2. From the following information, calculate the amount of subscriptions outstanding as at 31st March, 2021 Fan pac 250 members cach paying an annual subseription of 1,000, The receipts ‘and payments account for the year ao ee ox of € 2465,000 received as subscriptions The following additional information's provided eee ee Amt?) “Sabseriptions oustanding on Sst March, 2020 | Subserptions received in advance on 31st March, 021 Subscriptions received in advance on SIst March, 2020 | Ans. ~ Particulars “Sahneriptions received During the Year, 202021 (+) Received in advance on 31st March, 2020 2.77,000 (6) Received in advance on 1st March, 20% (30.00) 2.47,000 (-) Outstanding on 3ist March, 2020 | (40,000)_ ‘Total amount of Subscriptions to be Shown in Income and Expenditure Account (250 members * 1,000) Outstanding as on Btst March, 202 ling as on Stst NE Bie10 | CBSE Terrml | Accountancy} : Example 3. Following is the receipts and payments account of Good Health Sports Club for the year, ended 3st December, 2021 Receipts and Payments Account { Dr for the year ended 31st December, 2021 Cr | Receipts ‘Amt (2) Payments Amt) | To Balance b/d 10,000 |By Building 54,000 ] To Donations for Building 50,000 |By Match Expenses 450 ‘To Life Membership Fee 4,000 |By Furniture : 550 To Receipts from Matches 8,000 | By Investments (Purchased on Ist April, 16,000 » ‘To Subscriptions (including & 100 for 2015)| 5,200 | 2021 @ 20% per annum) To Lockers Rent 4400 | By Selaries 2020 2,000| ‘To Interest on Investments 240 2021 5,000] 7,000 To Sale of Furniture (Book value % 800) 1,000 | By Insurance: 350 ‘To Entrance Fees 3,000 | By Sundry Expenses 970 By Balance c/d 520 81,840 81,840 Additional Information () Subscriptions outstanding on 31st December, 2020 were % 200 and on 31st December, 2021 were ® 300. (ii) Outstanding salaries for the year ended 31st December, 2021 were % 800 and outstanding bills for sundry expenses were & 600. (ii) Donations for building includes € 10,000 for general donations. Prepare income and expenditure account of the club for the year ending 31st December, 2021. Ans. Income and Expenditure Account Dr for the year ending 31st December, 2021 Cr Expenditure ‘Amt (®) Tncome Amt @) To Match Expenses 450 | By General Donation 10,000 To Salaries 5,000 By Receipts from Matches 8,000 (+) Outstanding (2021) 800 | 5,800 |By Subscriptions 5,200 To Insurance 350 | ©) for: (100) ‘To Sundry Expenses (+) Outstanding (2021) 1,570 | (+) for 2021 (WN 1) 5,300 To Surplus ie, Excess of By Lockers Rent 400 Income over Expenditure 21,130 [By Interest on Investments 240 (4) Interest Accrued (WN 2) _2,160 2,400 By Profit on Sale of Furniture 200 (1,000 -800) By Entrance Fees 3,000 29,300 29,300 Working Notes 1. Out of subscription outstanding on 31st December, 2020 % 200, this year we have received subscription for 2020 2100, it means subseription still in arrears for 2020 = 200 ~ 100 = % 100, Subscription outstanding on 31st December, 2021 is ® 300, which includes € 100 outstanding subscription for 2021. ‘Thus, subscriptions outstanding for 2021 =300 ~ 100 =& 200, 2. Interest accrued on investment =16,000x20/100x9/12= 2,400 (>) Received during the year = _ (240) Interest due ©2160CBSE Termmll | Accountancy xi ixmple 4. Prepare opening and cl Exmpl pel me id ‘losing balance sheet from the following information cate es Slst March, 2020 (®) | Sist March, 2021 Cash at Bank 3000 20,000 cl 8,000 10.00 eae 16,000 14.000 illiard Table Py zn Fomiture sion 4 Investment conto seme Prepaid Expenses 20000 ane Building 1,00,000 1.00,000 Outstanding Expenses 10,000 | 60,000 ‘Subscription Received in Advance 24,000 40,000 Subscription Accrue 20,000 60,000 Surplus (Income over Expenditure) ~ 20,000 Ans. Balance Sheet (Opening) as at Slst March, 2020 Liabilities Amt @) ‘Assets Amt @) ®, Subscription in Advance 24,000 [Cash in Hand 12,000 Outstanding Expenses 40,000 |Cash at Bank 8,000 Capital Fund (Balancing figure) 196,000 | Books 16,000 Billiard Table 24,000 Furnitare 30,000 Investment peed Prepaid Expense 204 nana | 1,00,000 iki ‘Subscription Accrued [__ 22.000 2,60,000 260,000 Balance Sheet (Closing) as at 3st March, 2021 1 a Amt @)_| Assets |__Amt (©) Liabilities Sai 40,000 5 Subscription in Advance toon leanne 10,000 Outstanding Expenses © [Books 14,000 Capital Fund 2,16,000 | Billiard Table } 22000 (+) Surplus Furniture 25,000 Investment 2sano Prepaid Expenses Pa Building a ‘Subseription Acorued |_60,000_ ———_ 316,000 3,16,000 Exam the re \d payments account of Literacy Club for the year ended 31st March, 2021 le 5. Fol sceipts and pay! eracy Club for the year ended 31st Mar iple 5. Following is Receipts and Payments Account cr for the year ended 3lst March, 2021 _ 7 “Amt @, Payments a Receipts 19,550 [By Salary 2080 To Balance b/d By Newspapers ot ‘To Subscriptions 7 By Bley Bn oe -2020 "500 | | By Fixed Deposit a 2021-2022 aAns, CBSE Term | Accountancy Xi Receipts ‘Amt @) ‘Payments Amt @ “To Sale of Old Newspapers 1,250 [By Books 10.00 ‘To Government Grants 10,000 By Rent (5800 ‘To Sale of Old Furniture 5,700 |By Furniture 10500 (Book value ® 7,000) By Balance ef@ . ‘To Interest on Fixed Deposits 450 65,150 65,150 st March, 2021 € 2,500. 200. Additional Information {i) Subscriptions outstanding as 0 {ii) On Ist March, 2021 salary outstandi (ii) The club owned furniture & 15,000 anc Prepare income and expenditure account o capital fund on 3lst March, 2020. Also prepare Balance Sheet sn Bist March, 2020 were € 2,000 and on 31 ing was € 600 and rent outstanding was € 1d books €7,000 on Ist April, 2020. the club for the year en balance sheet as on 31st ‘ded 31st March, 2021 and as certain, March, 2021, ‘as at 31st March, 2020 eM Tame ®_] set Capital Fund (Balancing figure) 43.550 | Cash in Hand 1 Subscription Outstanding ‘urniture Ani |__| Boots 2 15550 | Income and Expenditure Account Dr for the year ended 31st March, 2021 cr Expenditure [Ame ®@ [ Income ‘Amt @ To Salary 3,000 | {By Subscriptions 26,500 (+) Outstanding oo | 3600) (+) Outstanding or A ‘To Newspapers 2.050 2020-21(Note) _1,700 | 28.200 Toler Bill | oan | ny sae or ota Newspaer To Rent 6.500 By Government Grants 10,000 (+) Outstanding, 1,200. 8,000 | By Interest on Fixed Deposit 450, To Loss on Sale of Furniture (7,000 ~ 1,300 (+) Accrued Interest 900) 1,350 A ‘To Surplus (Excess of Income over Expenditure) [0 am Toxo Subsorpton oustanding on dist March, 2021s €2.500 which includes the eubsrpionoutstancing for he ya, 224 Mo ae 200 roceved dung 2020-21, Hence, the subscription outstanding for 2020-2 i & 1,700 tana B00) should be noted tal hee i a cilerence between subscription outstanding an 31st March, 2021 ie, 2 phon outstanding for 2020-21 which neat subscration outstanding oni for 2020-21 Balance Sheet as at 31st March, 2021 Liabilities ‘Amt @ Assets ‘Amt (2) Salary Outstanding 600 |Cash in Hand 11,200 Rent Outstanding 1,200 |Subseription Outstanding Subseription Received in Advance '500 for 2019-20 (2,000 ~ 1,200) 800 Capital Fund (B1st March, 2020) 43,550 or 2020—21 1,700) 2,500 (+) Surplus 24850 | 68,400 [Fixed Deposit 20,000 |Acerued Interest on Fixed Deposit 00 "Furniture (15,000 ~7,000 + 10,500) 18,500 [Books (7,000 + 10,600) 17,600 70,700 70,700| ae Chapter Practice 2A Objective Questions © Multiple Choice Questions 1. Choose Non-Profit Organisation (NPO) from the following. (@) Oscar Pvt. Ltd. OR b) Rajesh exports (6) Infosys foundation (@)- Priv An. his aon realty nin 908 intr apa mcr th 2. Which of the following is not a revenue expenditure? / (a) Insurance: rs 7 @) {b) Leeturer's honorarium —(e) Municipal tax (@) Purchase of fixed asset Ans. (d) The benefit of fixed assets is enduring in nature Le. benefit extends beyond one accounting yes 3. There are 450 members in Cheema cl a nbers in Cheema club, paying an annual subscription of € 100 each. Subscription caer a an caress 2800 nang 400 for next ea The aoa tobe shown aa outstanding subscription will be : (a) © 20,000 (0) € 66,000 (©) £70,000 (@) €24,000 45,000 Ans. (d) Annual Subscription = 450100 (Subscription received for current year (25,000 4,00 Subseription outstanding, If expenditure is € 20,000 and surplus credited to capital fund & 2,050, income is (@ €17,950 (b) 22,000 (c). None of these (@) Cant be determined ‘ns. (e) Surplus = Income ~ Expenditure 2.050=X X =20,000 + 2,050 = € 22,050 5, Sports Star Charitable Club has income of £16,000 and ‘deficit’ debited to capital fund of 24,300 for the year 2019-20, then expenditure for the year 2019-20 is (a) € 11,700 (b) € 4,300 (©) €20,00 (@) None ofthese ‘Ans. (c) Income of Sports Star Charitable Club 16,000 4) Deficit Debited to capital fund forthe Year 2019-20 4.500 Expenditure for the year 2019-20 20,300 (CBSE 2020) 6, Which of the following statements is not true for receipts and payments account? ‘summary of the cash book. its of revenue nature only. (a) Iisa at to current, preceding or succeeding accounting periods {b) It records receipts and payment (6) The receipts and payments may (@ Depreciation is not shown in it. ‘Ans. (b) All cash receipts and cash payments whether 7. Which of the following is not to be recorded in receipts and payments accou {q) Sale of old newspaper) Lassonssle fffixed asset (@) Payment made to worker (2) ‘Ans. (b) Only the amount that has been reeelved on the sale of fixed assets would be recorded. are included. nt of a club? None of these + of eapital nature or revenue nature, —CBSE Term-I! | ‘Accountancy xy & ces ip fees received by club is shown in the -.. 8. Life membershi {@ income and expenditure account {b balance sheet {© receipts and payment account {@) profit and loss account ‘Ans. b) Life membership fee would be capitalise. if salary paid during the x . at amount of salary is to be transferred to income and expenditure account, Pare oan salar fing at the end ofthe year 10,500 and salary outstanding ot the ‘year was & 80,000 and salary outstan beginning of the year € 6,545? (876,085 () 83,955 (© £97,085 (@) 762,955 ‘Ans. (b) Salary paid during the year 30,000 (4) Salary outstaiding at the end 10,500 (6,545) (Salary outstanding at the beginning Salary amount transferred to income and expenditure 10. Match fund of €1,500 exists in the books. Matel shown in the income and expenditure account (@) 23,500 () 500 (© €2,000 (@) 21500 ‘Ans. (b) 2500 shown on the debit side of income and expenditure account. 44. Calculate the amount of locker rent to be transferred to income and ex} account 83.955 sh expenses for the year amount to € 2,000. «~~. will be penditure account. Particulars | Bist March, 2019 (2) ‘Outstanding locker rent 9,200] 12,600 Advance locker rent 6,000 8,000 Locker rent received during the year 2019-20, % 64,000. (@)¥ 65,400 () € 66,500 (6) 66,000 (873,000 ‘Ans. (a) Locker rent paid during the year 64,000 (+) Locker rent outstanding at year end 2020 12,600 (4+) Advance locker rent received in the year 2019 6,000 (A) Outstanding locker rent in the year 2019 (9,200) (—) Advance locker rent received in the year end 2020 (6,000) Locker rent to be shown in income and expenditure account = © 65,400 12. Consider the following statements. (i) Income and expenditure records both capital and revenue items. (ii) Receipts and payments account record revenue and capital items during the year Alternatives {@) Only (i) correct (b) Only (correct (0) Both are correct (@)_ Both are incorrect Ans, (a) Income and expenditure records only revenue items. 48, Find incorrect combination {a) Opening capital—opening balance sheet (b) Subscription-source of income (6 Sports chb-non-proit organisation (@) Receipts and pts and payments account ~ nominal account, Ans, (d) Receipts and payments account is a real account in nature. i sia aoe 44. Match column I with the column II and select correct answer using the codes given below. Column 1 Column I ‘A. Endowment fund (i) _ Posted to credit side of income and expenditure account B,_Entrance fees {i)_Any income or loss adjusted in the income and expenditure account C._ Sale of old assets (ii) Sometimes capitalised and sometimes treated as revenue receipt 1D. Sale of old newspaper _(iv) Permanent means of supportCBSE Term-tI | Accountancy xiI = fa) (iv) (iii) Gi) (a) b) ® & ab Bie Syl bm & Ans. (a) (iv) (iit) (ii) (i) * Assertion-Reasoning MCQs Direeti Nos. 1 t0 5) 11 moe 2. aa 1 t0 5) There are two statements marked as Assertion (A) and Reason (R). Read arnont ts and choose the appropriate option from the options geen bole eee (a on (a Reason (Ri) aro tru and Reason (Ris the correct explanation of ASsertion (A) (2) Both Assertion (A) and Reason (R) a it (3 meet rt eon Pegg Pit Reason (snot the correct explanation of Assertion (A) (@) Assertion (A) is false, but Reason (R) i toe Assertion (A) nominal cost. ‘The main objective of non-profit organisation is to serve the society at free of cost ora Reason (R) It is managed by the managing eommittee who is elected by its members ‘Ans. (0) Both Assertion (A) and Reason (R) are true, but Reason (R) isnot the correct explanation of Aseertion (A). Assertion (A) Opening and closing balances are recorded in income and expenditure account. Reason (R) It is prepared at the end of accounting yea ‘Ans. (d) No opening and closing balances are recorded in income and expenditure account. xs 3. Assertion (A) Income and expenditure account is prepared on accrual basis of accounting, Reason (R) The transactions related to current year are added and those relate to previous or followed year are to be subtracted. Ans. (a) Both Assertion (A) and Reason (R) are tre and Reason (R) isthe correct explanation of Assertion (A). 4, Assertion (A) Balance sheet shows the financial position of the company. Reason (R) Re ‘Ans. (b) Balance sheet is prepared at the end of accounting period to ascertain the financial position ofthe company 5. Assertion (A) NGOs are charitable trusts or societies and subscribers to such organisation are called members. Reason (R) Profits are distributed among its members. Ans, (c) Profit are not distributed among members. © Case Based MCQs 4. Direction Read the following case study and answer the question no, (i) to (ix) on the basis of the same. Following is the receipts and payments account of Sears Club, Noida as on 31st March, 2020. Receipts and Payments Account of Sears Club cipts and payments records cash receipts and eash expenditures. Dr for the year ended 31st March, 2020 cr Receipts ‘Amt ®) Payments ‘Amt (@) ba 20,000 | By Stationery 23,400 To Subseriptine By 12% Investments 8,000 “ae 400 By Elerity Expenses sim 2019-20 94,000 By Expenses on Lectures anon 2020-21 141,200 | By Sports Equipment 00 ‘To Donations for Building 40,000 | By Books snot To tere on reste 00 | Bac fd ' Interest on Investmen ed To Government Grant id To Sale of Old Furniture (Book value & 4,000) aaa] [erCBSE Termél | Accountancy Xi Additional Information (@) The elub has 200 members each paying an annual subscription of 81,000. € 60,000 were in arrears for lai year and 25 members paid in advance in the last year for the current year. (b) Stock of stationery on Ist April, 2019 was % 3,000 and 31st March, 2020 was @ 4,000. (i) Loss on the sale of old furniture is (a) @ 1,600 (b) 75,600 Ans. (c) 4,000 — 1,600 = % 2,400 (ii) Stationery consumed during the year was .. (9) 72,400 (@ Insufficient data (a) %30,400 (b) % 16,400 (c) 722,400 (d) % 26,400 ‘Ans. (6) 3,000 + 23,400 ~ 4,000 = & 22,400 (iii) How much interest on investment should be received during the year? (a) 7960 (b) 7160 ( %800 (d) % 1,080 Ans, (a) Total Interest on Investment 3,000 x 12/100= % 960 (iv) The total annual subscription of the firm will be (a) % 25,000 (b) % 2,00,000 (ce) % 50,000 (d) %1,00,000 Ans, (b) 200 members «1,000 each = 7 2,00,000 2. Direction Read the following case study and answer the question no. (i) to (iv) on the basis of the same. Namanjyot Society showed the following position Balance Sheet asat 31st March, 2018 Liabilities Amt (%) Assets Amt @) ‘Capital Fund 72,000 | Furniture 40,000 Subscriptions Received in Advance 6,000 [Cash at Bank 30,000 Cash in Hand 8,000 _ 78,000 Receipts and Payments Account Dr for the year ending 31st March, 2018 Cr Receipts Amt (%) Payments Amt @) To Balance bid By Computers (Ist October, 2018) 100,000 Cash at Bank By Office Expenses 29,000 Cash in Hand 54,000 | By Electric Charges 15,000 To Sale Proceeds of Old Newspapers 900 | By Postage and Stationery 9,000 To Locker’s Rent 7,000 |By 10% Investments (on Ist December, 2017) 60,000 To Interest on Investments 1,600 | By Balance ef To Entrance Fees 50,000 | Cash at Bank 80,000 To Life Membership Fees 1,00,000 | Cash in Hand 35,500 | 1,15,500 To Membership Subscriptions 98,000 To Subscriptions for Relief Fund 17,000 3,28,500 3,28,500 Additional Information (a) Computers were to be depreciated @ 60% p.a. and furniture @ 10% p.a. (b) Membership subscription included 20,000 received in advance. (c) Electric charges outstanding & 10,000.CBSE Termll | Accountancy Xi (i) How much depreciation is to be charged on computers? @) © 60,000 (b) 730,00 000 {e) © 1,00,000 X Ans. (d) Computers have been purchase 00 (@) None of these 0 e purchased on Ist October, 2018 but concemed accounting year has been ended on SIst (ji) Accrued interest on investment will be... beast & @6000 (o) %2,000 (a) €400 ‘Ans, (d) Interest on investment = 60,000 x 10/100 «4/12 = Aerie interest 200016002400 i) Subscription for relief fund will be transferred to (@) income and expenditure account (0) balance sheet (c) Both (a) and (b) (2) added in membership sub Ans. (b) This amount received is to satisfy specific purpose. ce (iv) Out of the total subscription received, current year subscription will be (@) 784,000 (b) €1,01,000 272,000 (a) @1,24,000 Ans. () Current year subserpton = Tal subsription received ~ Subscription recived in avance forthe nex year + Subscription received in last year for current year 100 ~ 20,000 + 6,000 = 84,000 2,000 Er Subjective Questions © Short Answer (SA) Type Questions 1. State the meaning of non-profit organisation. ive is not to earn profit but to provide services to its Ans. Not-for-profit organisations are those organisations whose object members and to the society. These organisations are set up forthe welfare ofthe society as a whole, rather than for the renehtoFany one individval and are set up for the purpose of promoting culture, art, religion, education ete, e.g clos, hospitals, libraries, schools, societies for promotion of sports arts and culture, ete the statement, ‘receipts and payments account is a summarised version of cash book’. of the cash book. This account is generally prepared by non-profit stipts are recorded on the receipts side (i.e. debit sic) and alleash payments are recorded on the ide) of receipts and payments account. I begins with the opening balance of eash and bank ends Fes and bank (balancing figure) at the end of the accounting period. It records all the eash and val and revenue nature, Which may relate not only to the current period but also to the i account helps an NPO in ascertaining closing cash balance, itis referred to (NCERT) 2. Explain (NCERT) ‘Ans. Receipts and payments organisations. all cash re payments side (ie. eredit si with the closing balances o bank transactions, both of eapi previous or next accounting period. Thi assummarised version of cash book. 3. “Income and expenditure account of a n business concern”. Explain the statement. ‘Ans. Income and expenditure account is prepared by a non-prol the accounting year Tnoome and expenditure account is akin to profit and loss accou amongst these accounts (i) Both are nominal accounts. Both are prepared on acerual bas i) Both record revenue items relate (iv) In both the accounts, expenses and losses are credit side, account is a summary and loss account of a (NCERT) {it organisation and is a summary of income and expenditure of jot-for-profit organisation is akin to profit int because of the following similarities which are observed «to current accounting year only. recorded on the debit side and incomes an \d gains are recorded on the 4, What is the capital fund? How is it calculated? . ea Ans. In case of not-for-profit organisation, & 1 fund can be considered as excess of its assets over its liabilities. Any strD'US PF ™ sce ange eran expenditure account is added to (deducted from) the eaptal find ‘This is also termed as accumulated fund.Calculation of Capital Particulars Capital Fund at the Beginning of the Year (4+) Surplus from Income and Expenditure Account (+) Entrance Fee (capitalised amount) (4) Life Membership Fee (~) Deficit From Income and Expenditure Account (through balancing figure) Capital Fund at the End of the Year CBSE Terrmll | Accountancy: Fund Amt (®) 5. Distinguish between not-for-profit organisations and profit earning organisations. Ans. The differences between not-for-profit organisations and profit earning organisations are Ans. Profit Earning Organisations Basis Not-for-Profit Organisations Motive ‘The main motive of such organisations is to ‘The main motive of such organisations is to earn provide services. profit. Funds The funds of such organisations are represented In profit earning organisations, fund is by the general fund comprising of donations, represented by capital contributions by subscriptions, surplus, ete, proprietors and accumulated reserves. Financial Financial statements of these organisations Financial statements of these organisations Statements comprise of receipt and payment account, include manufacturing account, trading account, income and expenditure account and balance profit and loss account and balance sheet sheet. Surplus/Profit The balance of income and expenditure The balance of the profit and loss account is, account is either surplus or deficit either net profit or net loss. Distribution of Surplus or deficit is not distributed among its Profit or loss is distributed among the owners of Profit members, It is adjusted in capital fund. the business. inisations maintain a capital fund tead of capital account. These or account i Capital vs Capital Fund ‘These organisations maintain a capital account. From the following information calculate the amount of subscriptions to be credited to the income and expenditure account for the year, 2020-21 Amt () Subscriptions received during the year 80,000 Subscriptions outstanding on 3lst March, 2020 26,000 Subscriptions outstanding on 31st March, 2021 6,000 Subscriptions received in advance on 31st March, 2020 15,000 Subscriptions received in advance on 3lst March, 2021 10,000 Subscription of € 2,000 are still n arrears for the year 2019-20 Particulars ‘Amt (2) Subseriptions Received During the Year 2020-21 80,000 (+) Received in Advance on lst March, 2020 15,000 (+) Outstanding for 2020-21 (6,000 — 2,000) Outstanding on 31st March, 2020 (26,000 - 2,000) () Received in Advance on 31st March, 2021 Income from Subscriptions for the Year, 2020-21 99,000 (24,000) 75,000 (10,000), 65,000CBSE Term | Accountancy xi 7. Find out the cost i “ost of medicines consumed during 2015-16 from the follos 2 dn wing information gNCERE) Perens vn a of medicines Ante, editors for medicines purchased Seen On Ist April, 2015, ; On dis Mar 20 ‘Stock of medicines : 0 On Ist April, 2015 , On 3ist March, 2016 Sox Advance to suppliers of medicines or © st pe 2015 On 3lst March, 2016 iat Ans. mad Particulars: eye fr Pachasesof Nedsno (+) Creditors for Medicines Purchases on 31 s Purchases on 31st March, 2016 (+) Advance for Medicines Purchases on Ist April, 2015 (A) Creditors for Medicines Purchases on 31st March, 2015 (-) Advance for Medicines Purchases on Ist Api, 2016 Purchase of Medicine During the Year, 2016 (+) Opening Stock of Medicines on Ist April, 2015 (5) Closing Stock of Medicine as on 31st March, 2016 Medicine Consumed During the Year 2016 8 On the basis of the information given below, calculate the amount of stationery to be debited to the income and expenditure account of Good Health Sports Club for the year ended 31st March, 2021. Ist April, 2020 31st March, 2021 ® ® Stock of stationery 8,000 6,000 Creditors for stationery 9,000 11,000 Stationery purchased during the year ended 31st March, 2021 was € 47,000 i Purchases of stationery during the year 2020-21 (4) Stock in the beginning (2)Stockat the end “Amount to be debited to income and expenditure account Note Creditors for stationery will be ignored because ‘stationery purchased (and not the amount pail for stationery) ‘during the years given in the question. es 9. From the following particulars relating to Royals Club, New Delhi, prepare a receipts and payments ‘Ist March, 2020. a the year ending 3. ee ne 150 Hand as on Ist April, 2019 96,000 Canhint Cash at Bank as on Ist April, 2019 Subseriptions Collected forthe year ending lst March, 2019 1st March, 2020 Sst March, 2021 30,000 440,000 12,000CBSE Terml | Accountancy Particulars ‘Ame @® Received 50,000, Donations Receive oe Donation Received for Pavilion 4000 8% Investments Purchased on Ist April, 2019 90.000 Purchase of Refreshments 24000 Rent Paid Pd Entrance Fee Received aso Honorarium to Secretary ae Interest on 8% Investments $3000 Fumiture Purchased aos Sale of Old Furniture (Gost & 12,000) om Sports Materials Purchased sooo Sale of Refreshments a Sports Expenses (including unpaid expenses © 10,000) so000 Gash in Hand as on 31st March, 2020 Depreciate Furniture @ 10% per annum Ans. Receipts and Payments Account Dr for the year ending 31st March, 2020 Cr Receipts Amt @) Payments Amt (2) ‘To Balance bid (Ist April, 2019) By 8% Investments Purchased 4,00,000 Cash 15,000 | By Purchase of Refreshments 24,000 Bank 96,000 |By Rent Paid 12,000 To Subscriptions (See WN 1), By Honorarium to Secretary 20,000 Year ending Ist March,2019 30,000 By Furniture Purchased 40,000 Year ending Sist March, 2020 4,40,000 By Sports Materials Purchased 1,60,000 Year ending 3ist March, 2021 | 482,000 | By Salaries and Wages 148,000 ‘To Donations Received 50,000 | By Sports Expenses 40,000 To Donation Received for Pavilion 4,00,000 | (50,000-10,000) (See WN 2) To Entrance Fee Received 36,000 | By Balance e/d (Bist March, 2020) ‘To Interest on 8% Investments 18,000 | Cash in Hand 12,400 To Sale of Old Furniture 8,000 | Bank (Balancing figure) 3,08,600 To Sale of Refreshments 11,65,000 Working Notes 1. Actual cash received on account of subse to past year, current year or next year 2. Unpaid expenses, etc. are not recorded in receipts and payments account. ition is recorded in receipts andl payments account whether itis eitCBSE Term | Accountancy xi 10. From the following information, ion, pre ;Pare income and expenditure account, Particulars Amt @) Fes Caled coding 65000 Neaing Ppa [amt ccount ofthe Previews be ccing Pxpenses fea ke tee en, 38,0000 [Travelling Exposes enon 100.000 [Purchase of Books and Periods, nding i Salary pal ncn € 3,000 om Account fr | Segal Sol san. ai a +2,80,000 |Rent Salary oustanding he Edo the Yeu 10.000 [Postage nd Tleph ‘as :ntertainment Expenses . 7 ta dein | a eta 80,000 fPrinting and Statoneny "8 120,000 | Donations Received 20,000 ans. a Income and Expenditure Account for the year ended Cr Expenditure Ant ® Income ‘mi @) Pee : 280,000 By Fees 3,00,000 andingat the End (4) Outstanding atthe End 1.00000 2.90000 | £9,00,000 (-) Outstanding in | (-) Outstanding in the Beginning 000) | »,60,000 the Beginning (600,000 31,00,000 ‘To Entertainment Expenses 0,000 {3 Donations 2.00 000 ‘To Tournament Expenses 1.20000 ‘To Meeting Expenses 180.000 To Rent 100.000 To Traveling Expenses ‘o,000 To Books and Periodicals 2,90,000 (2) Books (4,9.000)| 10,000 To Postage and Telephone 150,000 ‘To Printing and Stationery 40,000 ‘ToSurplis (Excess ofTncome over _—_‘22,60000 Expenditure) [Sanaa spenditure) lame 3500000, Note Amount spent onthe purchase of books a captl expen, henoeit shal not be shown in income and expencure account 11. From the following balances pret Cash in Hand Cash at Bank Books Billiard Table Furniture Investment Prepaid Expense Building Outstanding Expense Subscription Received in Advance ‘Subscription Accrued Surplus (Income over pare a balance sheet as on 31st March, 2021. Amt (2) Particulars 000 8,000 16,000 24,000 | 30,000 30,000 20,000 100,000 40,000 24,000 20,000 20,000 Expenditure)CBSE Term-II | Accour ntancy Xl Ans. Balance Sheet as at 31st March, 2021 ‘Amt @) Assets ‘Amt @) Subscription in Advance 24,000 [Cash in Hand 12,000 Outstanding Expenses 40,000 | Cash at Bank 8,000 Capital Fund (Balancing figure) 1,76,000 Books 16,000 (+) Surplus 20,000 | 1,96,000 | Billiard ‘Table 24,000 Furniture 30,000 Investment 30,000 Prepaid Expenses 20,000 Building 100,000 Subscriptions Accrued 20,000 2,60,000 2,60,000 12. From the following informa for ‘sports material consumed’ for the year 2019-20. Stock of Sports Mat Creditors for Sports M Sports Mater Cash Purchases of Sports Material (During the Year 201 Pau icul (Ist April, 2019) Amount Paid to Creditors (During 2019-20) Creditors for Sports Materials (Ist April, 2019) jerials @Ist March, 2020) 1 Sold During the Year (Book Value & 35,000) ‘Amt @) 60,000 3,00,000 1,00,000 30,000 15,000 41,30,000 lars 0) ‘There was zero stock at the end of financial year 2019-20. Ans. Dr ion, calculate the amount to be charged to income and expenditure account Creditors for Sports Materials Account a Particulars Amt ) Particulars Amt To Bank A/c (Payment for Sports Material) | 3,00,000 | By Balance b/d (Creditors in the Beginning) 1,00,000 To Balance c/d (Creditors at the End) £80,000 | By Stock of Sports Material A/e (Balance figure being. | 2,80,000 |Credit Purchase of Sports Material) 3,80,000 Dr Stock of Sports Material Account a Particulars Amt () Particulars Amt @ To Balance b/d 60,000 | By Bank A/c 35,000 To Creditors for Sports Materials A/c 2,80,000 | (Sports Material Sold During the Year) (Purchases transferred from Creditors Account) By Income and Expenditure A/e (Balancing 4,35,000 Figure, being Sports Material Consumed During the Year) To Bank A/c (Cash Purchases of Sports Material) |_1,30,000 4,70,000 |_4,70,000 13, Galeulate the amount of subscription to be credited to income and expenditure account for the year -20. Particulars Amt @ Amount Received During the Year (including 20,000 for 2018-19, € 30,000 for 2020-21 and % 10,000 for 2021-22) | 7,80,000 Subscription Received-in-advance as on Ist April, 2019 (including & 15,000 for 2020-21) 35,000 Subscription in Arrear as on Ist April, 2019 40,000 ‘Subscription in Arrear as on 31st March, 2020 50,000CBSE Term-II | Accountancy xi Out of subscription in arrears on 1si April, 2019, ¢ 15, ‘Ans. Dr i 9,000 are no longer recoverable, Subscription Account cr Particulars ‘Amt @ Particulars Amt) To Balance b4 (Areas in Beginning) 40,000 | By Balance bad (Advance in Begining 35.000 To Income and Expenditure Balancing figure) | 785,000 | By Receipts and Payments Aye 7,80,000 To Balance e/d (Advance at End) 155,000 [By Income and Expenditure Ale ‘15,000 By Balance ef (Arrears at End) 30,000 8,80,000 8.80,000 14, Receipts and payments accoui subscriptions during the year Additional Information int of Friends Association disclosed that it ha: ended on 31st March, 2020. eS Particulars Subseription Outstanding as on Ist April, 2019 (Out of which ® 7,000 were Received in 2019-20) Subscription Received in Advance on 31st March 2019 Subscription Received in Advance on lst March, 2020 Amt (2) 10,000 6,000 8,200 is received & 4,00,000 by way of Show the amount of subscription that will appear in income and expenditure account for the year ending 31st March, 2020 and the balance sheet as at that date in each of the following alternative cases (i) Ifsubscription outstanding for 2019-20 is € 12,800. (ji) I'subscription outstanding as on 31st March, 2020 is ® 12,800. Ans. Particulars oH ‘Amt (®) Subscriptions Received During the Year 2019-20 4,00,000 (4) Received in Advance on 31st March, 2019 (+) Outstanding for 2019-20 4.18,800 (Subscription Related to Previous Year, Received During the Year (7,000) (G Received in Advance on 31st March, 2020 (6200) Income from Subscriptions for the Year, 2019-20 “403,600 An Extract of Balance Sheet as at 31st March, 2020 Liabilities Amt @) Assets Amt @) i 8,200 | Subscription Outstanding Subscription Received in Advance ene For 2018-19 3,000 For 2019-20 12,800 | 45,800 Particulars Subscriptions received during the year 2019-20 (4) Received in advance on 31st March, 2019 (+) Outstanding for 2019-20 (© Subscription related to previous year, received during the year ( Received in advance on 31st March, 2020 Income from subscriptions for the yearCBSE Termil | Accountancy ) ‘An Extract of Balance Sheet as at 31st March, 2020 ‘Amt @) Assets Amt @ i 10 /100%3 /12 750 (500) (~) Received during the year Interest aceured but not received 7m Working Notes 1. Opening and 2. Expenses ineurred or purd 3. Entrance fees has been treated as a revenue item. billiards table in sports equipment, depreciation on that will be € 1,750. In that situation, surplus will be «losing cash and bank balance will appear in the opening and closing balance sheet respectively sof billiards table and furniture are capital expenditure, they will appear inthe balance sheet 4. Ifwe include 730, : 17, How will the following items be treated while preparing the fc arch, 2019? -for-profit-organisation for the year ended 31st March, 2019? eee ‘As at 31st March, 2018 \cial statements of a As at 31st March, 2019 Amt Amt (%) it ines 33,000 67,000 Creditors for medicines on ee Stock of medicines During 2018-19, the payment made to the ere editors was € 4,25,000. (CBSE 2020)CBSE Terml | Accountancy XI * Long Answer (LA) Type Questions Ans. Income and Expenditure Account Dr for the year ended 31st March, 2019 cr Expenditure ‘Amt @) Income ‘Amt @) | “To Medicine Consumed (WN2) 4,48,000 An Extract of Balance Sheet as at 31st March, 2019 Liabilities Amt @) ‘Assets ‘Amt @) Creditors for Medicines 167,000 [Stock of Medicine 49,000 Working Notes 1. Dr Creditors Account Particulars Amt @) Particulars To Bank Ne 4,25,000| By Balance bid ‘To Balance cfd [__ 67,000] By Stock of Medicine (Balancing figure) 4,92,000 2 Dr Stock Account cr. z Particulars Amt @) Particulars ‘Amt @) To Balance ef £27,000] By Income and Expenditure A/c (Balancing figure) | 4,43,000 ‘To Creditors (Purchase) 4,59,000) By Balance bil 43,000 4,56,000| 4,86,000 1. From the following receipts and payments account and additional information provided, prepare the income and expenditure account of Patel Education Society for the year ended 31st Mi larch, 2021, Receipts and Payments Account Dr for the ended 31st March, 2021 Cr Receipts ‘Amt Payments Amt @) To Balance bid 1,50,000 | By Rent 9500 ‘To Interest on Investments 5,000 | By Postage Expenses 1,500 To Subscriptions 180,000 | By 10% Investment (Ist July) 50,000 To Sale of Newspapers 3,000 |By Payment to Creditors 3,500 To Sale of Computers 15,000 |By Advertisement Expenses 11,000 ‘To Donations 75,000 | By Salaries 48,000 L By Balance cid 7500 428,000 4,28,000 Additional Information () Subscriptions due on 31st March, 2020 and 31st March, 2021 were € 3,500 and & 6,200 respectively. (i) Subscriptions paid in advance as at 31st March, 2020 were € 1,800 and on 31st March, 2021 were & 1,500. year, (iti) The book value of computers on Ist April, 2020 was € 50,000 of which half the computers were sold during the (iv) The book value of investments on Ist April, 2020 was € 75,000 and the rate of interest was 10% per annum. (¥) Creditors on 31st March, 2020 were & 7,500. (vi) Outstanding expenses for rent, postage and salaries for the current year were 7900, % 400 and & 15,000 respectively. Income and Expenditure Account for the year ended 31st March, 2021 cr ‘To Rent Pe Am) Income Amt (2) fcadeeet: 9500 By Intereston Investments an ‘To Postage Expenses 800 | 10,400 | (+) Accrued interest but not 1,500 | h (+) Outstanding Postage teceived (WN 1) 6.254 fotatiet TT Le 400| 1000 [By subsotpuon wns ca 3.45000 loys (+) Outstanding Salare Be By Sale of Newspapers ‘To Advertisemes ie Salaries 15,000 | 60000 {py Donations (WN. 4) To Loss on Sale of Computer 11,000 |By Deficit, ie. (Excess of fon anton 10,000 | Expenditure Over Income) 121,050 co apeR00 | a v wrking Notes 1. Calculation of accrued interest on investment Interest (Ist July, 2020) =50,000 «10,100 t 4 ee 9/12 Interest (Ist April, 2020) = 75,000 x10/ 100 Interest accrued during the year (J Interest received during the year Interest accrued but not received 2. Subscriptions received during 2020.21 (+) Subscription due (S1st March, 2021) Subscription received in advance (31st March, 2020) (~) Subscription due (81st March, 2020) Subscription received in advance (31st Marel Subscription to be credited to income and expenditure account 3, Creditors on 31st March, 2020 were 27,500 out of which €3,500 paid during the year, Remaining creditors are 4,000. Payment to creditors will not be recorded in current year income and expenditure account 4, Donations have been treated as of revenue natu 2. The following is the receipts and payments account of Queen's Club for the year ended 31st March, 2020, Receipts and Payments Account Dr for the year ended 31st March, 2020 Gr Receipts Amt @) Payments Amt @) To Balance bid 182,000 | By Salaries 16,000 To Subscriptions 1,80,000 | By Stationery 32,000 ‘ToTournament Fund 1,64,000 | By Rent 48,000 To Interest investment) 65,000 | Telephone Expenses 000 ‘To Donat 1,12,000 |By Sports Material and Expenses 78,000 To Sale of Concert Tickets 2,47,000 | By 6% Investments 5,000 td | By Miscellaneous Expenses 24,000 By Concert Expenses 58,000 __ [By Balance eld 9,50,000 aCBSE TermIl | Accountancy} Additional Information {) Subscriptions include € 12,000 for 2018-19 and % 18,000 for 2020-21. (ii) Stock of stationery on 31st March, 2019 and 2020 was & 7,200 and ¢ 5,400 respectively. (i) Stock of sports material at the beginning and end of the year was & 12,000 and € 21,000 respectively. fix) Rent includes 4,000 paid for March, 2019, Rent for March, 2020 is outstanding (0) Telephone expenses include & 3,000 as quarterly rent up to Bist May, 2020. (4) The value of building as on 3lst March 2019, was € 8,00,000 and you are required to write-off depreciation at 10%. (ii) The value of investments on 31st M during the year on Ist October, 2019, You are required to prepare the income and expenditure arch, 2019 was ® 10,00,000 and the club made similar additional investment ‘account of the club for the year ended 31st March, 2020. Income and Expenditure Account Ans. Dr for the year ended 31st March, 2020 G Expenditure ‘Amt @ Income Amt @) ‘To Salaries 1,66,000 |By_ Subscriptions 1,80,000 To Stationery (consumed) (2) Subscription for Opening Stock 7,200 2018-19 (12,000) (+) Purchases 32,000 2020-21 (18,000) 1,50,000 39.200 By Interest on Investment (-) Closing Stock (6,400) | 93,800] (+) Accrued Interest (Note) 75,000 To Rent 48,000 By Sale of Concert Tickets (©) Paid for March, 2019, (4,000) () Concert Expenses (68,000) | 1,59,000 44,000 [By Donations 112,000 (+) Outstanding for March, 2020 48,000 ‘To Telephone Expenses (-) Prepaid (3,000 «2/3) 6,000 . To Sports Material Opening Stock (+) Purchases 90,000 : (-) Closing Stock (21,000) | 69,000 ‘To Miscellaneous Expenses 24,000 ‘To Depreciation on Building (8,00,000 «10/100) 80,000 ‘To Surplus ie., Excess of Income Over Expenditure 99,200 5,26,000 Working Note Amt @) Accrued interest on investments 10,00,000 «6/100 60,000 5,00,000 x6/100«6/12 _ 15,000 75,000 (Interest Received Accrued Interest‘@BSE Term-It | Accountancy x1 3, From the following particulars rely, ‘end exper calars relating to the Ramkrishna Mission Charitable Hospital, prepare the income — nditure account for “for the year ended 31st March, 2020 and the balance thertee sea date. Dr Receipts and Payments Account for the year ended 31st March, 2020 Receipts ry _ Amt (2) Payments ’ Cash in Hand on Ist April, 2010 7150 ‘ L 7.130 [By Medicines To Subscriptions nape 47390 jy Bet’ onoratm 14500 |By Salaries To Interest on Investments @ 75 for full year | 7,000 | By Petty Expenses ‘To Receipt from Charity Show 10,450 [By Equipment by Expenses on Chatty Show By Cashin Hand on 31st March, 2020 87.076 Additional Information On Ist April, 2019(%) On Ist March, 2020 () Subscriptions due 240 280 Subscriptions received in advance 64 100 Stock of medicines 8810 9140 Estimated value of equipment 21,200 31,600 Building (cost less depreciation) 40000 38,000 Ans. Income and Expenditure Account Dr for the year ended 31st March, 2020 cr ‘Expenditure a Amt @) Income z [Ame @) ‘To Medicines Consumed By Subscription Received eset Opening Stock ssi0 Ciponeptin Date End 80 (hy Purchase 30300 (2) sasrtion Reseed sono Advance nthe Boing os (6) Closing Stock 20660 maw To Doctor's Honors m0 | (-) Doe inte Bening 20) ar500 Tsi00 Ta Sears 461 (2) Advance at the End (100) | 48,000 To Pty Expenses “ ai By Donations 14500 To Depreciationon Equipment soy By Interest on Investment 7,000 a eau By hary Show 10950 2) Paras 15.000 | 36200 | (-) Closing Balance (31,600) 4600 ‘To Expenses on Charity Show ‘To Depreciation on Building. ms ‘To Surplus (Balancing figure) [79,950CBSE Terrr-il | Balance Sheet as at 31st March, 2020 Liabilities ‘Amt @ Assets Subscription Received in Advance 100 | Cash in Hand Capital Fund [Subscription Due Opening Balance (WN) 1,77,316 ‘Stock of Medicine (+) Surplus 79 | 1,83,295 | Investments Equipment 38,000 q | 28000 183,395 183,305 7 Working Note Calculation of opening capital fund j Balance Sheet é as at Ist April, 2019 Liabilities ‘Amt @) Assets Amt) Subscription Received in Advance 64 | Cash in Hand 7,130 ‘ Capital Fund (Balancing figure) 1,77,316 | Subscription Due 240 Stock of Medicine 8,810 Investments" (7,000 x100/7) 1,00,000 Equipment 21,200 Building 40,000 1,77,380 1,77,380 4. The balance sheet of Mind Blowing Club on Ist April, 2019 and the receipts and payments account fr the year ended 31st March, 2020 are Balance Sheet as at Ist April, 2019 Liabilities Amt (%) Assets Amt @) Capital Fund 2,10,000 | Premises 2,00,000 Creditors for Stationery 5,000 | Furniture 10,000 Bank Balance 5,000 2,15,000 2,15,000 ‘ Receipts and Payments Account Dr for the year ended 31st March, 2020 Cr Receipts Amt (%) Payments Amt) To Balance b/d 5,000 | By Electricity Charges 6,000 To Subscriptions 43,000 | By Furniture 15,000 To Donations (Not to be capitalised) 16,500 | By Salaries 30,000 To Sundry Receipts 13,750 | By Creditors for Stationery 12,500 By General Expenses 10,500 By Balance e/d 78,250 78.250CBSE Term-II | Accountancy x1 Addi nal Information (i) On 30th September, 2019 the ola furnit, y it tember, een furniture was donated to the Red Cross and new furniture was purchased on . baer ao Depr " @ 10% per annum is to be provided on the furniture. Po 700, atch. 2020 the creditors far stationery were 82,400 and the value ofthe unused stationery was (Gi) A payment of % 2.500 for stationer You are required to pre ry by the club was to be debited to the general expenses. pare the income and expenditure account for the year ended 31st March, 2020 and the balance sheet as at that date Ans. Income and Expenditure Account Dr for the year ended 31st March, 2020 Cr Expenditure |_Amt @) Income Amt (®) To Electricity Charges 6,000 | By subseript 43,000 To Salaries 30,000 | By Donations 16,500 To General Expenses 10,500) By Sundry Receipts 13,750 (+) Payment for Stationery 13,000 To Stationery Consumed (WN 2) 44700 To Furniture (Donated to Red Cross) 10,000 To Depreciation on Furniture 750 (@ 10% per annum on & 15,000 for 6 months) To Surplus (Excess of Income over | 8,800 Expenditure) ——— 73,250 73,250 Balance Sheet as at 31st March, 2020 Liabilities Amt (3) Assets |_amt @ Creditors for Stationery 2,400 | Cash at Bank 4,250 ‘a Fu 2,10,000, Stock of Stationery 2,700, Capital Fund 10, (+) Surplus 300 | 218,800 | Premises 200,000 Furniture 15,000 (~) Depreciation (750)| 14.950 2,21,200 |__ 221,200 Lire ee Creditors for Stationery Account Cr 1 articulars Amt (%) Date Particulars Amt (%) | Date poe i 2019 2020 a 5,000, 2,5¢ April L | By Balance b/d a Mar 31 |To Bank Ale ara |e i Mar 31 |To Balance e/d a foc ae Mar 31 |By Purchases of Stationery Ae 9,900 (Balancing figure) 14,900 14,900CBSE Termil| Accountancyxy, gge Tern 2 Consumption of Stationery Particulars Amt @) Purchases of Stationery (As above) 9.900) = (~)Stationery to be Debited to General Expenses (2.500) Ca Unused Stock on 31st March, 2020 2.700) | 6.200) Stationery Consumed | — <7 cr 5. The Treasurer of India Tennis Club presented the following receipts and payments account for the year _| ended 31st March, 2021. Receipts and Payments Account Dr for the year ended 31st March, 2021 cr Amt (2) Payments Amt @) ‘To Cash at Bank (Opening) 10,200 | By Purchase of Tennis Balls 4.000 To Subseriptions 24,000 | By Refreshments Creditors 22,000 To Sales of Refreshments 90,500 | By Marking and Repairing Courts 3,800 To Court Hire 2,700 |By Construction of New Court 25,000 By Cash at Bank (Closing) 13,200 71,100 71,100 Additional Information Particulars Ist April, 2020 @) | 3ist March, 2021 @ ‘Tennis balls on hand (at cost) 400 | 900 Creditors for refreshments 44000 3,000 Subscriptions outstanding 2,000 3.500 Club Courts 60,000 ats Prepare an income and expenditure account for the year ended 31st March, 2021 and show the balance sheet as on that date. Also prepare the relevant accounts for c computation of various items. Ans. Income and Expenditure Account Dr for the year ended 31st March, 2021 Cr 7 __Expenditure [ame @] Income ‘Amt @) ‘To Marking and Repairing Courts 8.800 | By Profit on Sale of Tennis Balls (WN 1) 200 ‘To General Expenses 3,100 By Subscriptions (WN 2) 25,500 To Surplus (Excess of Income over 31,000 | By Profit on Refreshments Expenditure) Sales of Refreshments 30,500 | (5) Purchase of Refreshments (WN 3) (21,000) | 9,500 By Court Hire 2,700 37,900 37,900(CBSE Term-Il | Accountancy xi Balance Sheet as at 31st March, 2021 Liabilities Amt @ ‘Assets Amt @ Gapital Fund (WN 4) 68,600 : (+) Surplus cours Sonne 31,000 | 99,600 |(+) New Courts 25,000 | 85,000 Greditors for Refreshments 3000 [Tennis Rell 08 (Cash at Bank 13,200 Subscriptions Outstanding 3500 102,600 | 302,600 Working Notes 1 Dr ‘Tennis Balls Account Cr _____ Particulars Amt @)| Particulars | Amt @ ‘To Opening Stock 400 | by Bank Ave (Ses) 3.700 ‘To Bank A/c (Purchases) 4,000 | By Closing Stock 00 ‘To Profit on Sale of Tennis Balls 200 (Balancing figure) - 4600 4,600 2. Dr Subscriptions Account = Particulars Amt @) Particulars [Ame @ —— 24,000 ‘To Subscriptions Outstanding By Bank Ale tals ‘To Income and Expenditure A/c By Subscriptions Outstanding Creditors for Refreshments Account hee Particulars [amt @) Particulars Amt (%) al 22,000 | By Balance b/d 4,000, ete 3,000 | By Purchases of Refreshment 21,000 ‘To Balance old { (Balancing figure) am 25000 | 5 Balance Sheet : as at Ist April, 2020 . ‘Amt @] Assets | Ame Spas t Fe = 0 Sapital Fund (Balancing figure) ” ei | 19200 Creditors for Refreshments 4,000 |Tennis Balls [Cash at Bank Subscriptions Outstanding 72,600 [as6. From the following receipts and payments account of Jan Kalyan Club, preps CBSE Terrmil | Accountancy; sare income and expendit account and balance sheet for the year ending 31st March, 2020. we Receipts and Payments Account Dr. for the year ended 31st March, 2020 Gr Receipts Amt @) Payments ‘Amt @ "To Cash in Hand as at Ist Apel, 2019 6.800 [by Salaries 24,000 ‘To Subscriptions 60,200 | By Travelling Expenses 6,000 ‘To Donation 3,000 |By Stationery 2,300 ‘To Sale of Furniture 4,000 |ByRent 16,000 (Book value € 6,000) By Repair 700 To Entrance Fee 800 |By Books Purchased 6,000 ‘To Life Membership Fee 7,000 | By Building Purchased 30,000 ‘To Interest on Investment 5,000 | By Cash in Hand as at 3st March, 2020 1,800 (@ 5% for fll yea) itt 36,800 186,800 Additional Information Items Ason Ist April, As on3Ist March, 2019 Amt (2) 2020 Amt (2) Subscriptions received in advance 1,000 3,200 Outstanding subseriptions 2,000 3,700 Stock of stationery 1,200 800 Books 18,500 16,500 Furniture 16,000 8,000 Outstanding rent 1,000 2,000 Income and Expenditure Account Dr for the year ended 31st March, 2020 Cr Expenditure Amt@[_____ Income [Amt (® ‘To Loss on Sale of Furniture(6.000- 4000) | 2,000 | By Subseriptions 60.200 ‘To Salaries 24,000 | (-) Outstanding for 2019 (2,000) ‘To Travelling Expenses 6,000 58,200 To Stationery 2,500 (+) Outstanding for 2020 3,700 (+) Opening Stock 1,200 61,900 3,500 (4) Advance in 2019 1,000, (0) Closing Stock (800) | 2,700 62,900 To Repairs | 700} (=) Advance in 2020 (6.200) | 59,700 To Rent [By Donation 3,000 (©) Outstanding for 2019 By Entrance Fees 800 By Interest on Investment 5,000 (+) Outstanding for 2020 2,000 | 17,000 ‘To Depreciation on Furniture 2,000 ‘To Depreciation on Books 3,000 “To Surplus (Excess of Income over 11,100 Expenditure) ; 68,500 | 68,500—— Hy CBSE Term | Accountancy xi Balance Sheet as at Ist April, 2019 Amt () Assets Amt®), Outstanding Subscriptions [Cash in Hand 5 6,800 Capital Fund (Balancing figure) Fnvestments, 00034 ) 006 Subscriptions Outstanding 2.000 Books 13500 Furniture 16,000 Stock of Stationery 1.200 [59.500 139,500 Balance Sheet asat 31st March, 2020 Liabilities Amt) [Assets Amt @® Capital Fund 1,87,500 Subscription Outstanding 3700 (+) Life Membership Fees "7,000 | Stock of Stationery 800 14,500 Investment 100,000 (+) Surplus 11,100 1,55,600 | Books Advance Subseription 3.200 |(+) Purchase Outstanding Rent 2,000 19500 |(-) Depreciation (3,000) | 16,500 Building 30,000 Cash in Hand 1,800 Furniture 16,000 \(-) Sale (6,000) 10.000 (~) Depreciation (2,000) [-1,60,800 160,800)on (Pe Multiple Choice Questions 1. Which of the folowing is nota revenue receipt? ' (0) Donaons for tourament.(@) Government grants (@Subseplons (0 trance fes 2. On tst Apri, 2018, Maiteyi Club had a Prize Fund of €8,00,000. t incurred expenses on prizes amounting to © 870,000 during the year. The balance of prize fund inthe balance sheet as at 31st March, 2019 wil be (@ € 70000 (by € 800,000 (9 € 70,000 () 220 '3. Which of the following statements is not true for income and expenditure account? (a) Itrecords items of revenue nature only (b) Items recorded int relate only to the current period (Depreciation isnot recorded in this account (0) It does not have an opening balance 4. In the absence of any information, entrance fees treated as (@) revenue receipt (b) capital receipt (© cash receipt (None ofthese '5. IF income is € 10,550 and deficit debited to capital fund to @ 960, expenditure will be @ % 9570 () @ 11530 {@) None of these (@) Can't be determined Short Answer (SA) Type Questions 1. Show the treatment of items of income and expenditure account when there isa specific fund for those items. 2, Distinguish between income and expenditure account and profit and loss account. 3. Show, how will you deal with the following items while preparing the final accounts, for the year ending on 31st March, 2021 in each of the following alternative cases, (0 Prize awarded & 12,000. (i) Prize awarded & 12,000, prize fund as at 31st March, 2020 & 25,000 (i) Prize awarded € 12,000, prize fund as at 31st March, 2020 & 25,000, donation received for prizes during the year 2020-21 8 10,000, 10% prize fund investment as at 31st March, 2020 € 25,000, interest received on 10% prize fund investment & 2,500, 4, How will the following items be treated while preparing the income and expenditure account and balance sheet of a not-for-profit-organisation for the year ended 31st March, 2019? ‘As at Ist April 2018 As at 31st March, 2019 Amt) Amt @) Creditors for sports materials 18,000 41,000 Stock of sports materials 27,000 38,000 During 2018-18, the payment made to creditors for sports material was 8 5,23,000, 5. From the given receipts and payments account and additional information of Shine Club for the year ended 31st March, 2019, prepare income and expenditure account for the year ended 31st March, 2019, Receipts and Payments Account of Shine Club Dr for the year ended 31st March, 2019 a Receipts ‘Amt (%) Payments Amt To Balance b/d ~ 50,000 |By Furniture and Equipments 112,000] To Donations 45,000 | By Salaries 32,000) To Subscriptions | By Balance c/d 3400) 2017-18 | 2018-19 | 2019-20 66,600 To Interest Received 5,800 167,400 | 4670)CBSE Term-ll | Accountancy Xxit Additional Information (0 Furniture and equipments w furniture and equipments "2"? Purchased on tst October, 2018, Depreciation @ 10% pa. was to be provided on Gi Subscriptions in arrears for the year 2018-19 were € 2,000, Long Answer (LA) Type Questions 3 the foll 1, From the fo eee and Payments account of Soni Club and from the given adeltionl information, prepare 2019 and 3ist December, 050, °F the year ending 3Ist December, 2020 and the balance sheet as on 3ist December, (i) Outstanding salary & 6,000. = Receipts and Payments Account for the year ended 31st December, 2020 Or Receipts Amt @ Payments ‘Amt @® To Balance b/d 190,000 ey Satan 30, To Subscriptions y Salaries 3,30,000 6,60,000 |By Sports Equipment 4,00,000 To etary atnvestments @ 8% per annum | 40,000 Jay Balance c/d +,60,000 890,000 | 890,000 Additional Information {i) The club had received & 20,000 for subscription in 2019 for 2020. (i) Salaries had been paid only for 11 months. {i Stock of sports equipment on 31st December, 2019 was & 3,00,000 and on 31st December, 2020 X 6,50,000, . Following is the receipts and payments account of Lions Club for the year ended 3ist December, 2020, Receipts and Payments Account Dr for the year ended 31st December, 2020 cr Receipts [Ame @ Payments, ‘Amt @) To Cash in Hand (Ist January, 2020) | 4,500 | By Bank Overdraft (Ist January, 2020) 9,300 To Subscriptions By Investment in Securities 9,000 2019 300 By Furniture 4,350 2020 48,600 By Salaries 18,600 2021 450 | 49,950 |By Printing and Stationery 2670 To Income from Entertainment 870 |By Miscellaneous Expenses 4,260 To Entrance Fees 2,010 |By Balance on (31st December, 2020) To Interest on Securities 1800 | Cash in Hand 1650 Cash at Bank 9300 | 10.950 59,130 | 59130 Prepare the income and expenditure account of the club for the year ended 31st December, 2020 and the balance sheet as at that date having due regard to the following additional information (i) The club has 5,400 members, each paying an annual subscription of & 10. Subscriptions amounted to & 270 are in arrears in respect of the year, 2019. (ii) Stock of stationery on 31st December, (ii) Entrance fees are to be capitalised (iv) Salary of & 1,650 for December 2020 is outstanding. Expenses accruing on 3ist December 2019 srntaned to F380 Fhe hob paid & 1,000 in the year, 2019 towards telephone charges of which & 375 relate t0 2020, (w) Ac on 3tet Deceraber 2019 premises stand inthe books at 73,50 and investments at ¢ 19500, Depreciate premises ‘snd furniture by 10% per annum (Furniture was purchased on Ist January, 2020), 2019 was & 375 and on 31st December, 2020 was & 261. Answers For Detailed Solutions Multiple Choice Questions Scan the code 1@ 2@ 3 4) 5)CHAPTER 02 Reconstitution of a Partnership Firm Retirement/Death of a Partner In this Chapter. # Retirement of a Partner * Treatment of Goodwill * Revaluation of Assets and Reassessment of Liabilities © Death of a Partner Retirement of a Partner Retirement of a partner means retiring from the firm. ic Het the modes of reconstituting the firm undet which an old partnership comes to a the continuing partners (ie. partners other than the outgoings partner) comes into existence, however, the firm ness death ofa partn ned, whereby the re end and a new one between continues its b cer, the existing partnership deed comes to an endl and in its plage a Went mag partners continue todo their business on changed terms and On the retirement partnership deed is conditions. Adjustments required at the Time of Retirement of a Partner + Adjustment in profit sharing ratio, + Adjustment for goodwill «Adjustment of profit/loss arising on the revaluation of assets and reassessment of liabilities. « Adjustment of accumulated profits, reserves and losses. 1g partner and payment to retiring partner. + Computation of amount due to re «Adjustment of capitals (if agreed). New Profit Sharing Ratio ‘After retirement of a partner, the new ratio in which the con tinuing partners (ie. partners other tan the outgoing ater) decides to shinee the future profits ane osses, is known as net profit sharing ratio.