FUND BASED ACCOUNTING

Book Name: Ultimate Book of Accountancy class 12th CBSE

Author: Dr. Vinod Kumar

1. How would you treat the following while preparing financial statements for a
Not-for-Profit Organisation?
Tournament fund…………………………………………………….. 50,000
Tournament expenses……………………………………………… 8,000
Receipts from tournament……………………………………….. 10,000
(Ans. Rs. 52,000 B/S liabilities side)

2. How would you treat the following while preparing financial statements for a
Not-for-Profit Organisation?
Billiard match expenses…………………………………………….. 3,800
(Ans. As there is no specific fund, Rs. 3,800 will be shown in income and expenditure
account.)

3. How would you treat the following while preparing financial statements for a
Not-for-Profit Organisation?
Prize fund……………………………………………………………………. 8,500
Interest on prize fund investment…………………………………. 1,500
Prizes Distributed……………………………………………………… 2,000
Prize fund investment…………………………………………………… 6,000
(Ans. Rs.8,000 B/S Liabilities side and Rs. 6,000 assets side )

4. How would you treat the following while preparing financial statements for a
Not-for-Profit Organisation?
Receipts from cinema show ……………………………………….. 2,600
Expenses on cinema show …………………………………………. 1,200
(Ans. Income and exp. A/c Rs.1,200 Dr. side and Rs. 2,600 Cr. side)

5. How will you show the following information in the financial statements of the
Vinod Education Trust on 31st March 2020.
Particulars Amount
Tournament Fund 90,000
Tournament Fund Investment 90,000
Income from Tournament Fund Investment 12,000
Tournament Expenses 10,000
Additional Information: Interest accrued on Tournament Fund Investment Rs.3,000.
(Ans. Rs.95,000 Liabilities side and 90,000 Assets side)
6. How would you treat the following while preparing financial statements for a
Not-for-Profit Organisation?
Match expenses………………………………………………………… 25,000
Match fund…………………………………………………………………15,000
Donations for match fund …………………………………………… 9,000
Sale of match tickets …………………………………………………….6,000
(Ans. Rs. 5,000 B/S liabilities side)

7. How would you treat the following while preparing financial statements for a
Not-for-Profit Organisation?
What will happen if total match expenses are more than incomes?
Match expenses…………………………………………………………… 34,000
Match fund ………………………………………………………………… 15,000
Donation for match fund ………………………………………………. 9,000
Sale of match tickets …………………………………………………….. 6,000
(Ans. Income and expenditure account debit side Rs. 4,000)

8. How will you show the following information in the financial statements of an
NPO on 31st March 2020?
Match Fund ……………………………………………………..5,00,000
6% p.a. Match Fund Investment (1 July 2019).….5,00,000
Donation for Match Fund ………………………………..1,00,000
Proceeds from the sale of Match Tickets …………..80,000
Match Expenses …………………………………………….6,50,000
(Ans. B/S Liabilities Side 52,500 and Assets side 5,00,000 along with interest 22,500)
9. (When Expenditure is more than the Fund)
How will you show the following items in the Balance Sheet of Vinod Welfare Club on
31st March 2021?
Particulars Amount
Capital Fund (1st April 2020) …………………………………………………………… 7,00,000
Building Fund (1st April 2020) ………………………………………………………… 6,00,000
5% p.a. Building Fund Investment (1 April 2020) …………………………..
st 6,00,000
Donation for Building received during the year ………………………………. 2,00,000
Interest received on Building Fund Investment 30,000
……………………………………
Additional Information: Expenditure on construction of Building Rs.10,00,000.
Construction work is in progress and not completed yet.
(Ans. Balance Sheet Liabilities side: Building Fund Nil and Capital Fund 15,30,000 and
Assets side Building Fund Investment 5,00,000 and Building 10,00,000)

10. Show the treatment of following items:

Poor girls’ marriage fund…………………………………………………………. 2,00,000
Donation received towards the fund……………………………………….….. 40,000
Expenditure made on Poor girls’ marriage……………………………….. 2,50,000
(Ans. Income and Expenditure account Dr. 10,000)