alleryIn NPO accounting, surplus refers to:
AExcess of cash in hand
BExcess of income over expenditure
CCapital exceeding liabilities
DDonations received in year
Answer & Solution
Correct answer: B. Excess of income over expenditure
1. Surplus is the NPO equivalent of profit.
2. It equals income over expenditure for the period.
3. It is added to the Capital/Accumulated Fund.
_Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", §1 ¶3_
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