alleryStart learning →A donation received with a specific condition, such as for a prize fund, is:
AA capital receipt of the concern
BA revenue receipt of the year
CA revenue expenditure incurred
DAn item to be simply ignored
Answer & Solution
Correct answer: A. A capital receipt of the concern
1. The textbook distinguishes donations by whether a condition is attached.
2. A donation received without any specific condition is a general donation and is a revenue receipt.
3. A donation received with a specific condition for a particular purpose, such as a sports fund or prize fund, is a specific donation and is a capital receipt.
4. Such a specific donation is added to the relevant fund on the liabilities side rather than taken to the income and expenditure account.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 2 "Accounts of Not-for-Profit Organisation", §2.4_
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