Home › Tamil Nadu HSC (Class 12) › accountancy › Accounts of Not-for-Profit Organisation › The purchase of sports materials such as balls a…
The purchase of sports materials such as balls and nets is treated as:
ARevenue expenditure to the extent consumed
BCapital expenditure, shown in the balance sheet
CA capital receipt of the whole organisation
DAn item excluded from the final accounts
Answer & Solution
Correct answer: A. Revenue expenditure to the extent consumed
1. The textbook separates sports materials from sports equipment.
2. Sports materials such as balls, bats and nets are consumable items.
3. The amount of sports materials consumed is taken as revenue expenditure in the income and expenditure account.
4. The value of unconsumed sports materials is shown as an asset in the balance sheet.
5. Sports equipment, such as a table tennis table or a billiards table, is capital expenditure instead, so a single word decides the treatment.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 2 "Accounts of Not-for-Profit Organisation", §2.4_
Related questions
Which item would appear in the receipts and payments account but NOT in the income and expIn this textbook's balance sheets, legacies and life membership fees are:A club has 400 members each paying Rs 150 a year. Subscription outstanding for the currentA match fund stood at Rs 30,000. Receipts for the match fund during the year were Rs 22,50A club's assets total Rs 1,30,000 and its liabilities, being subscription in advance Rs 5,Prize fund stood at Rs 60,000. During the year interest on prize fund investments was Rs 6Opening stock of sports materials was Rs 3,000, purchases during the year Rs 9,000 and cloA club has 300 members each paying Rs 200 a year. Subscription received for the current ye