Prize fund stood at Rs 60,000. During the year interest on prize fund investments was Rs 6,000, a donation to the prize fund was Rs 12,000 and prizes distributed cost Rs 8,000. The prize fund in the balance sheet is:

1. A specific fund is adjusted within itself, on the liabilities side, and none of its items touch the income and expenditure account. 2. Start with the opening prize fund of Rs 60,000. 3. Add the interest on prize fund investments of Rs 6,000, because income of the fund belongs to the fund. 4. Add the donation for the prize fund of Rs 12,000, which is a specific donation and so a capital receipt. 5. Subtract the prizes distributed of Rs 8,000, since expenses of the fund are met from the fund. 6. The closing prize fund is therefore Rs 70,000, while the prize fund investment of Rs 60,000 continues to appear on the assets side. _Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 2 "Accounts of Not-for-Profit Organisation", Illustration 15_