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in Accounting for Not For Profit Organisation by (27.3k points)
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How will you treat the following items by a not for profit organisation? 

1. Sale of periodicals

2. Payment of Honorarium 

3. Special fund 

4. Government Grant

1 Answer

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1. Sale of Periodicals: It is an item of recurring nature and shown as the income side of the income and expenditure a/c. 

2. Payment of Honorarium: It is the amount paid to the person who is not the regular employee of the institution. This amount is shown on the expenditure side of the income and expenditure a/c. 

3. Special fund: The special fund such as prize fund, match fund, sports fund, etc. are invested in securities and income from such investment is added to the respective fund and the expenses incurred on such specific purposes are deducted from the specific fund. Special funds are shown on the liability side of the balance sheet. 

4. Government fund: The recurring grants (maintenance grant) by the government is treated as revenue receipt (income) and credited to income and expenditure a/c. Grants such as building grant are treated as capital receipt.

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