Harmony Social Officers Club provided the following asset and liability balances at the start of the accounting period on 1st January 2026:
| Item | Amount (₦) |
|---|---|
| Sports Equipment | 600,000 |
| Bar Inventory | 45,000 |
| Bank Balance | 120,000 |
| Subscriptions in Arrears | 15,000 |
| Subscriptions Received in Advance | 25,000 |
| Accrued Refreshment Expenses | 35,000 |
What is the accumulated fund of the club as of 1st January 2026?
- ₦720,000Answer
- B₦740,000
- C₦790,000
- D₦840,000
Answer
The accumulated fund of the club as of 1st January 2026 is ₦720,000.
The accumulated fund of a non-profit organization is determined by taking the total value of its assets and subtracting its total liabilities at a given date. Adding the assets (Sports Equipment ₦600,000, Bar Inventory ₦45,000, Bank Balance ₦120,000, and Subscriptions in Arrears ₦15,000) yields ₦780,000. Subtracting the liabilities (Subscriptions Received in Advance ₦25,000 and Accrued Refreshment Expenses ₦35,000, totaling ₦60,000) gives the correct accumulated fund of ₦720,000.
Step-by-Step Solution
Key Concept
Calculation of Accumulated Fund (Statement of Affairs for Non-Profit Organizations)
Estimated Time:1m 30s