Pairs of non-profit entity financial transactions and accounting procedures are given below. Match each financial item to its exact treatment in the Income and Expenditure Account.
- Honorarium paid to a guest lecturer for an academic workshopDebited as a revenue expenditure in the Income and Expenditure Account
- Unrestricted legacy received from a deceased member's estateCredited as a general revenue income in the Income and Expenditure Account
- Purchase price of a new bus acquired for a sports clubExcluded from the Income and Expenditure Account as a capital expenditure
- Net proceeds derived from organizing a special charity dinnerCredited as net income to the Income and Expenditure Account after deducting direct activity costs
Cevap
Honorarium paid to a guest lecturer matches with being debited as a revenue expenditure; Unrestricted legacy matches with being credited as general revenue income; Purchase price of a new bus matches with being excluded from the Income and Expenditure Account as a capital expenditure; Net proceeds from a special charity dinner matches with being credited as net income after deducting direct activity costs.
The Income and Expenditure Account operates on accrual accounting rules for revenue items only. Operational costs like honoraria are debited as revenue expenditure; unrestricted legacies are credited as general revenue income; capital purchases like vehicles are excluded and listed on the Balance Sheet; and special event earnings are credited net of direct activity costs.
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Anahtar Kavram
Revenue versus Capital Item Classification in Non-Profit Income and Expenditure Accounts