Accounting Treatment of Peculiar Items in Nonprofit Organizations

This video tutorial provides an in-depth understanding of accounting treatments for various items in nonprofit organizations (NPOs). It covers the accounting of subscriptions, donations, legacies, life membership fees, entrance fees, and the sale of assets, periodicals, and sports materials. The tutorial explains how these items are recorded in financial statements, emphasizing the differences between revenue and capital receipts and the importance of cash and accrual accounting methods.

What is the primary accounting treatment for subscriptions received by nonprofit organizations?

• They are treated as capital receipts.

• They are shown as liabilities.

• They are credited as income in the income and expenditure account.

• They are debited as expenses.

How are specific donations treated in the financial statements of nonprofit organizations?

• As liabilities in the balance sheet.

• As revenue receipts in the income and expenditure account.

• As assets in the balance sheet.

• As expenses in the income and expenditure account.

What distinguishes a general donation from a specific donation?

• General donations are treated as capital receipts.

• General donations are shown as liabilities.

• General donations have no specified use.

• General donations are always larger in amount.

How are legacies with unspecified use treated in nonprofit accounting?

• As capital receipts.

• As specific legacies.

• As liabilities.

• As general donations.

What is the accounting treatment for life membership fees in nonprofit organizations?

• They are shown as assets.

• They are shown as liabilities.

• They are debited as expenses.

• They are treated as revenue receipts.

How are entrance fees generally treated in nonprofit accounting?

• As revenue receipts.

• As capital receipts.

• As expenses.

• As liabilities.

What happens to the book value of an asset when it is sold?

• It is added to the capital fund.

• It is shown as income.

• It is shown as a liability.

• It is deducted from the asset's book value.

How is the sale of old newspapers or periodicals treated in nonprofit accounting?

• As liabilities.

• As revenue incomes.

• As expenses.

• As capital receipts.

What is the accounting treatment for the sale of sports materials in a sports club?

• As capital receipts.

• As liabilities.

• As revenue incomes.

• As expenses.

How is a loss on the sale of an asset recorded in nonprofit accounting?

• As a capital receipt.

• As an asset.

• As a liability.

• As an expense in the income and expenditure account.