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Specific donation for building ₹10,000 received and Pavilion cost ₹11,000 incurred. Treatment:
ACredit ₹10,000 to I&E
BCredit ₹10,000 to Building Fund
CCredit ₹11,000 to Building Fund
DDebit ₹10,000 to I&E
Answer & Solution
Correct answer: B. Credit ₹10,000 to Building Fund
1. Specific donation is credited to Building Fund (capital receipt).
2. Pavilion ₹11,000 is capitalised as an asset on Balance Sheet.
3. Shortfall of ₹1,000 over donation is funded from capital fund / general resources.
_Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", Illustration 1_
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