Page 12 - DEBKVOL-1

1.2 Double Entry Book Keeping—CBSE XII
• Fund Based Accounting: If an organisation has established a fund for a specific purpose or has received
donation for specific purpose. It is credited to a separate Fund Account. The expenses relating to it and income
from it are debited and credited respectively to that fund.
Credit balance in the Fund Account is shown in the liabilities side of the Balance Sheet. In case, the balance in Fund
Account (Other than Fund for Assets) is debit, it is transferred (debited) to Income and Expenditure Account.
Treatment of Special Items
• Entrance Fee/Admission Fee: Entrance Fee/Admission Fee is a revenue receipt and therefore accounted as an
income and credited to Income and Expenditure Account.
• Life Membership Fee: These receipts are of non-recurring nature and should be added to Capital Fund in the
Balance Sheet.
• Special Receipt: It is not credited to Income and Expenditure Account but is shown in the liabilities side of
the Balance Sheet. Example: Contribution towards Annual Dinner. Expense incurred against Special Receipt is
written off against it. Balance, if any, is transferred to Income and Expenditure Account.
• General Donations: General donations are credited to Income and Expenditure Account.
• Specific Donations: Specific donations are shown in the liabilities side of the Balance Sheet.
• Legacy: Legacy is the amount received as donation by a Not-for-Profit Organisation under will of a deceased
person. When donor does not specify conditions for its use, it is accounted as revenue receipt and credited to
Income and Expenditure Account. But if a condition is specified for its use, it is accounted as capital receipt
and credited to a Specific Fund Account maintained for the purpose.
• Sale of Assets: Gain (Profit) on sale of assets is credited to Income and Expenditure Account and loss is debited
to Income and Expenditure Account.
• Sale of Old Sports Materials Already Written Off is credited to Income and Expenditure Account.
• Subscriptions: It is accounted as income. Current year’s subscriptions are calculated as follows:
Subscriptions Received during the year ...
Add: Subscriptions outstanding for the year ...
Subscriptions received in advance in the beginning of the year ... ...
...
Less: Subscriptions outstanding in the beginning of the year ...
Subscriptions received in advance at the end of the year ... ...
...
• Consumption of ‘Consumable Goods’ to be shown in the Income and Expenditure Account
Consumed Goods = Opening Stock of Consumable Goods + Purchases – Closing Stock.
Solved Questions

Illustration 1.
How will you deal with the following items while preparing the Income and Expenditure
Account for the year ending on 31st March, 2012:
Particulars As at 1st April, 2011 (`) As at 31st March, 2012 (`)
Creditors for Sports Materials 2,000 1,300
Stock of Sports Materials 3,000 500
During 2011–12, the payment made to these creditors was ` 10,800. There were no cash
purchases of sports material. (MSE Chandigarh 2015)
Solution: Calculation of Credit Purchase of Sports Material:
Dr. CREDITORS FOR SPORTS MATERIAL ACCOUNT Cr.
Particulars ` Particulars `
To Cash A/c 10,800 By Balance b/d 2,000
To Balance c/d 1,300 By Stock of Sports Material A/c 10,100
(Credit Purchases) (Balancing Figure)
12,100 12,100