GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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General donations of relatively large amount is recorded on the
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Liabilities side of Balance Sheet
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Receipts side of Receipts and Payments Account
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Both (a) and (b)
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Income side of Income and Expenditure Account
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Explanation:
Detailed explanation-1: -Both general and specific donations received are shown in the receipts and payments account. Q. Dr. Cr.
Detailed explanation-2: -Specific donations are shown on the liabilities side of balance sheet.
Detailed explanation-3: -General Donations of small amounts are treated as revenue receipts and big amounts are of non-recurring nature and are treated as capital receipts.
Detailed explanation-4: -General Donation is the donation in which the donor does not specify any condition for its use. The amount of general donation is an income and we credit it to Income and Expenditure Account. Specific Donation: In case the donor specifies the purpose for which the donation should be used, it is a Specific Donation.
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