Q.

Patna Club has a prize fund of Rs.8,00,000/-.It incurs expenses on prizes amounting to Rs.7,50,000/-The expenses should be:

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a

Debited to income and expenditure account and presented on the assets side of the balance sheet

b

Presented on the assets side of the balance sheet

c

Deducted from the prize fund on the liabilities side of the balance sheet

d

Debited to income and expenditure account

answer is D.

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Detailed Solution

If the balance of the prize fund exceeds the expenses incurred so they shall be directly deducted from the prize fund on the liability side of the balance sheet.

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