alleryEndowment fund of ₹2,00,000 is set up. Income from this fund (interest received) ₹15,000. The interest is:
ACredited to Endowment Fund
BReduced from capital
CCredited to I&E Account
DTreated as cash deposit
Answer & Solution
Correct answer: C. Credited to I&E Account
1. Endowment principal is preserved; only its income is generally available for use.
2. Interest earned ₹15,000 is revenue income for the period.
3. Hence credited to I&E unless restricted by donor terms.
_Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", §3.1 endowment funds_
Keep practising Financial Statements of Not-for-Profit Organisations
Browse all Financial Statements of Not-for-Profit Organisations questions for CA Foundation, or explore more Accounting topics.
Related questions
Compared with a balance sheet, an income statement represents what?In a statement of activities, revenues and expenses are further categorised by what?Charitable organizations that publish financial statements produce which statement in placWhat fraction of members must decide for a society to be dissolved voluntarily under SectiWhere is a society's memorandum filed under the 1860 Act?Under the Societies Registration Act, 1860, what is the minimum number of people needed toAn accrued expense is a liability for goods or services that were?Accrued revenue refers to income that is?