ECONOMICS

Detailed explanation-1: -Donations and Charities are the indirect expenses for the business firm. That is why these expenses are shown in expenses side of Profit and Loss Account.

Detailed explanation-2: -A Charity Account is a segregated client account, holding all the details of your charitable giving in one place. It allows you to make tax-free donations to LCVS and/or any other charity or charitable organisation and, like a bank account, it records all the income and expenditure.

Detailed explanation-3: -The organization may utilize this amount for meeting revenue or capital expenses. However, when it receives the donations for a special purpose then it needs to credit this amount to a separate fund before disbursing it.

Detailed explanation-4: -Charities and donations being a non-business expenditure are disallowed while computing Income from Business and maybe allowed u/s 80G if it is an eligible donation for computing Total Income and will be shown on the debit side of the Profit and Loss a/c.