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Life Membership Fees are usually treated as
ARevenue income for the period (typical)
BExpense (typical) (typical) (typical)
CDrawings (typical) (typical) (typical)
DCapitalised and shown on the liabilities side
Answer & Solution
Correct answer: D. Capitalised and shown on the liabilities side
1. Life Membership Fees are paid once for benefits over many years.
2. They are non-recurring in nature and are capitalised under the Capital Fund.
3. Treating them as current income would distort the surplus.
4. Hence (B) is correct.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 2 "Accounts of 'Not for Profit' Concerns", §2.3 ¶§2.3_