alleryStart learning →Honorarium paid to a person who is not a regular employee is:
AA capital expenditure of the year
BA capital receipt of the concern
CA revenue receipt of the concern
DA revenue expenditure of the year
Answer & Solution
Correct answer: D. A revenue expenditure of the year
1. An honorarium is the remuneration paid to a person who is not a regular employee of the organisation.
2. It is a payment for services rendered during the year, recurring in the ordinary course of activity.
3. The textbook states that it is a revenue expenditure.
4. It therefore appears on the debit side of the income and expenditure account.
5. Being a payment rather than a receipt, the two receipt options are ruled out at once.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 2 "Accounts of Not-for-Profit Organisation", §2.4_
Keep practising Accounts of Not-for-Profit Organisation
Browse all Accounts of Not-for-Profit Organisation questions for Tamil Nadu HSC (Class 12), or explore more Accountancy topics.
Related questions
A club's assets total Rs 1,30,000 and its liabilities, being subscription in advance Rs 5,How is a bank overdraft at the beginning of the year entered in the receipts and payments In the balance sheet of a not-for-profit organisation, a surplus for the year is:When a club sells old furniture, what enters the income and expenditure account?The purchase of sports materials such as balls and nets is treated as:The capital fund of a not-for-profit organisation is also called the:Interest earned on prize fund investments should be:Subscription received in advance during the current year for the next year is shown in the