Entrance Fees
Options
A
B
C
D
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Financial Statements of Not-for-Profit OrganisationsQ-3 | Not-for-Profit OrganisationsQuestion 5126 of 44
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
Entrance Fees:
The Associations collect entrance fees/admission fees from the new members at the
time of their admission. It is different from the membership fees/subscriptions, which are received every year
and hence treated as revenue income and transferred to Income & Expenditure
account.
But the entrance fees is received only once from a member, hence it can be treated as
follows:
(a) If the amount is just sufficient to recover the expenditure incurred while
admitting any member then it will be treated as revenue income and
transferred to Income & Expenditure account.
(b) Otherwise the entrance fees can be capitalized & transferred to the Trust Fund
Account. OR;
(c) Entrance fees may be treated as deferred Income and shown in the Balance
Sheet under the head "Entrance Fees Account" & Part-amount can be written
off every year by transferring to Income & Expenditure A/c in proportion to
the benefit extended to the members, estimated on some suitable basis.
More Questions from Financial Statements of Not-for-Profit Organisations
The following Trial Balance is the Trial Balance of a Proprietor as on March 31st 2024. Prepare Trading and Profit & Loss Account for the year ending March 31st 2024 and a Balance Sheet as at that date. Particulars Amount Particulars Amount Plant and Machinery 5,00,000 Capital 4,00,000 Office Furniture 26,000 Sundry Creditors 5,20,000 Opening stock 4,80,000 Sales 48,00,000 Motor van 1,20,000 Bills payables 56,000 Sundry debtors 4,57,000 Provision for doubtful doubts 25,000 Cash in hand 4,000 Return outwards 55,000 Cash at Bank 65,000 Discount received 37,000 Wages 15,00,000 Salaries 1,40,000 Purchases 21,35,000 Bills Receivable 72,000 Return inwards 93,000 Drawings 70,000 Advertisements 60,000 Factory Rent 8,000 Insurance 63,000 General Expenses 10,000 Bad debts 25,000 Discount allowed 65,000 58,93,000 58,93,000 Additional Information to be considered: (i) Closing Stock on March 31st 2024 is 5,20,000. (ii) During the year, Plant and Machinery was purchased for ₹ 3,00,000 but it was debited to Purchase Account. (iii) 3 months factory rent is due but not paid ₹ 3,000. (iv) Provide depreciation at 5% per annum on furniture and 10% on plant and machinery and motor van. (v) Further bad debts 7,000. (vi) Provision for doubtful debts to be increased to ₹ 30,000 at year end. (vii) Provision for discount on Debtors to be made at 2%. [Sept. 2024, 10 Marks]
Income and Expenditure A/c
Receipt and Payment A/c
Entrance Fees
Membership fees
Donation
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