If a designated Fund balance such as a "Tournament Fund" exists in the books of a Non-Profit Organisation (NPO), then the explicit expenses incurred o - Accountancy MCQ CUET Accountancy 2023 28 May Shift 1 2026 | ExamTest.live

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If a designated Fund balance such as a "Tournament Fund" exists in the books of a Non-Profit Organisation (NPO), then the explicit expenses incurred on executing such tournament activities must be shown:

A $on the debit side of the Income and Expenditure Account$
B $on the credit side of the Income and Expenditure Account$
C $by way of adding to the Tournament Fund in the Balance Sheet$
D $by way of subtracting/deducting from the Tournament Fund in the Balance Sheet$

Solution & Step-by-step Explanation

Under fund-based accounting frameworks used by NPOs, specific funds are maintained under Liabilities on the Balance Sheet. Expenses related to that fund's purpose are directly deducted from the specific fund's balance on the liabilities side, rather than being debited to the Income and Expenditure Account.

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If a designated Fund balance such as a "Tournament Fund" exists in the books of a Non-Profit Organisation (NPO), then the explicit expenses incurred on executing such tournament activities must be shown:

on the debit side of the Income and Expenditure Account

on the credit side of the Income and Expenditure Account

by way of adding to the Tournament Fund in the Balance Sheet

by way of subtracting/deducting from the Tournament Fund in the Balance Sheet

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