Match each operational term or account header of a non-profit organization on the left with its corresponding financial description or accounting treatment on the right.
- Accumulated FundThe capital equivalent in a non-profit entity, computed as total assets minus total liabilities.
- SurplusExcess of recurrent income over revenue expenditure, credited to increase the accumulated fund.
- HonorariumEx-gratia payment made to an individual for voluntary professional services rendered to the organization.
- Subscriptions Received in AdvanceCurrent liability representing membership fees collected in the current period for a future financial year.
Answer
Accumulated Fund matches with 'The capital equivalent in a non-profit entity, computed as total assets minus total liabilities'; Surplus matches with 'Excess of recurrent income over revenue expenditure, credited to increase the accumulated fund'; Honorarium matches with 'Ex-gratia payment made to an individual for voluntary professional services rendered to the organization'; Subscriptions Received in Advance matches with 'Current liability representing membership fees collected in the current period for a future financial year'.
Each non-profit accounting term is matched to its true accounting definition: Accumulated Fund is the excess of assets over liabilities (capital equivalent); Surplus is the net excess of income over expenditure added to accumulated fund; Honorarium is an ex-gratia payment for voluntary services; and Subscriptions Received in Advance are deferred income classified as a current liability.
Step-by-Step Solution
Key Concept
Nature and Financial Features of Non-Profit Organizations