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Difficulty: EasyCalculation of Accumulated Fund

The following financial records were extracted from the books of Evergreen Cultural Society at the beginning of the financial year on 1st January 2025:

- Library Equipment: N450,000\text{N}450,000
- Furniture: N200,000\text{N}200,000
- Cash at Bank: N80,000\text{N}80,000
- Subscriptions Received in Advance: N30,000\text{N}30,000
- Accrued Rent: N15,000\text{N}15,000

What is the Accumulated Fund of the society as of 1st January 2025?

  1. ₦685,000Answer
  2. B
    ₦730,000
  3. C
    ₦745,000
  4. D
    ₦775,000

Answer

The Accumulated Fund of the society as of 1st January 2025 is ₦685,000.
The correct answer is derived by subtracting the total liabilities (Subscriptions Received in Advance of ₦30,000 + Accrued Rent of ₦15,000 = ₦45,000) from total assets (Library Equipment of ₦450,000 + Furniture of ₦200,000 + Cash at Bank of ₦80,000 = ₦730,000), giving ₦685,000.

Step-by-Step Solution

1
Calculate Total Assets
Total Assets = Library Equipment + Furniture + Cash at Bank = N450,000+N200,000+N80,000=N730,000\text{N}450,000 + \text{N}200,000 + \text{N}80,000 = \text{N}730,000
Accumulated fund relies on establishing total asset value.
2
Calculate Total Liabilities
Total Liabilities = Subscriptions Received in Advance + Accrued Rent = N30,000+N15,000=N45,000\text{N}30,000 + \text{N}15,000 = \text{N}45,000
Subscriptions received in advance and accrued expenses represent obligations of the non-profit entity.
3
Compute Accumulated Fund
Accumulated Fund = Total Assets - Total Liabilities = N730,000−N45,000=N685,000\text{N}730,000 - \text{N}45,000 = \text{N}685,000
Accumulated fund represents the net equity of a non-profit organization.

Key Concept

Calculation of Accumulated Fund for Non-Profit Organizations
Estimated Time:1m 0s
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Topics

Calculation of Accumulated Fund

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