1. Entrance Fee/Admission Fee:
Entrance Fee or Admission Fee is the amount paid by a person at the time of becoming a member of a Not - For - Profit Organisation . Entrance Fee or Admission Fee is a revenue receipt and therefore is accounted as an income and credited to Income and Expenditure Account .
2. Life Membership Fee :
Life Membership Fee is accounted as a Capital Receipt and added to capital Fund on the Liabilities side of the Balance Sheet. It would be improper to account Life Membership Fee as income because a life member makes one time payment and avails services all through his life .
3. Special Receipts :
Special Receipts means receipts of amount for special occasions.For example , contributions received for annual dinner . Such contributions are credited to separate account ( Annual Dinner Account in this case ) expenses against these receipts are debited to it . The balance is transferred to the income and expenditure account .
4. Donations :
A charitable institutions often receives donations . The donations received may be a general donation or a specific donation.
(1) General Donation : General Donation is the donation in which the donor does not specify any condition for its use . The amount of general donation is accounted as an income and credited to Income and Expenditure Account .
( 2) Specific Donation : In case the donor specifies the purpose of which the donation can be used , it is a Specific Donation . For example , a donor donates Rs 10,00,000 for constructing a library . It means the donation received can be used only for constructing a library , i.e., it is a specific donation . Specific donation is capitalised and is shown on the Liabilities side of the Balance Sheet.
Important Note :
Entrance / admission fees and general donation are to treated as revenue receipts .
5 .Legacy :
Legacy is the amount received as donation by a Not - For - Profit Organisation under WILL of decreased person . The donor may or may not specify conditions for its use . In case , no condition is specified , it is accounted as ' General Donation .' And if a condition is specified , it is accounted as ' Specific Donation '. It is accounted for in the books of account as follows :
(1) General Donation : It is accounted as revenue receipt and is credited to Income and Expenditure Account .
( 2) Specific Donation : It is accounted as capital receipt and is credited to ' Fund Account ' maintained for the purpose ( e.g. Prize Fund ) . It is shown on the Liabilities side of the Balance Sheet . It being a fund , principles of Fund Based Accounting are applied ,i.e., income relating to such fund is credited to the fund while expenses are debited .
6. Sale of Used sports Material :
Stock of Sports material is shown in the assets side of the Balance Sheet . However , a part of it may be consumed during the year Sports Material consumed during the year is debited Income and expenditure account and balance amount is carried forward in the balance sheet .
In case , old sports material that is shown as consumed ( debited to income and expenditure account ) is sold the sale proceeds are shown in credit of Income and Expenditure Account , i.e., is shown as income .
In case , old material appears in the Balance Sheet and is sold , gain ( profit ) if any on sale of old sports material ( Sale proceeds - Book value ) is credited to Income and Expenditure Account , i.e., is shown as income .
7. Sale of Old Assets :
Sale of an asset may result in profit , if sale value is more than the book value ; or loss , if sale value is less than the book value ; or neither Profit nor loss, if sale value is equal to book value . Book Value of an asset as on the date of sale is determined after charging depreciation up to the date of sale. Book Value is credited to the asset account while profit , if any , is credited and loss , if any , is debited to the asset account while profit , if any , is credited and loss , if any , is debited to the Income and Expenditure Account .
8. Sale of Old Newspaper :
Amount realised from the sale of old newspapers is accounted as an income and credited to Income and Expenditure Account .
9. Subscriptions :
It is the amount paid by the members periodically so that their membership remains alive . It is a source of income of Not - For - Profit Organisation .
Subscriptions relating to the current year whether received or not , are shown on the credit side of the Income and Expenditure Account . Subscriptions not received , i.e., outstanding are shown on the assets side of the Balance Sheet . Subscriptions received in advance for the following year are shown the Liabilities side of the Balance Sheet.
10 . Honorarium :
Honorarium is a token payment made to a person who has voluntarily undertaken a service which would normally command a fee . It is an expression of gratitude rather than a payment for the service . For example , payment made to an invited teacher for delivering a lecture is an honorarium . Honorarium is debited to Income and Expenditure Account .
11. Revenue Expenses :
Expenses incurred for day - to - day activities or operations and are recurring nature are revenue expense . Examples are : wages , salaries , rent , printing and stationary , insurance , advertisement , etc . Revenue Expenses also include expenses incurred on the maintenance of fixed assets , e.g., repair , depreciation , etc. All such expenses are debited to the Income and Expenditure Account .
12. Revenue Receipts :
Receipts such as rents , proceeds from entertainment concerts shows , lectures and Interest on investments are revenue receipts and shown on the credit side of Income and Expenditure Account .
13. Capital Expenditure :
Expenditure that gives benefit of enduring nature , i.e., the benefit of which is not exhausted or consumed within the accounting period is capital Expenditure . Example : purchase of books , furniture , investments , building , etc .are treated as capital expenditures and shown on the assets side of the balance sheet .
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