Chapter No 1 Lecture No 2

In leacture 1 and Lecture 2 I have Provided you the Important definitions of 2nd Years First Chapter. Today this Chapter will be Completed Inshallah soon i will provide you the videos of Long Questions of this Chapters . In case of any confusion you can Contact on 0302-8151714

So you Can Learn Accounting at Home

1.      Define legacy?

The amount given to a non trading concern as per the will of deceased person is known as legacy. It should be treated as capital receipts and included capital fund account.

2.      Define donations?

Donation is the amount received from some person, firm, company or any other body by way of gift.

if donations are for specified purpose then it should be treated as capital expenditures and otherwise credited to income and expenditure account

3.      What is subscription?

The amount paid by the member annually to keep their membership alive is known as subscription.

It should be credited to income and expenditure account.

4.      What is special subscription?

It is the special subscriptions collected form the members who participate in a particular activity because of the cost involved in providing these may vary considerably.  It should be credited to income and expenditure account.

5.      Define life membership fee?

This is a system where by a member pays a lump sum and then becomes a member of the whole life.

Life member not required to pay the annual membership fees. As life membership fees is a substitute for annual membership fees only fair portion is to considered in income and expenditure account. If not mentioned treat all the amount.

6.      Define entrance fees?

At the time of admission every new member is to pay specific fee in addition to subscription called entrance fees. It should either treat as capital or revenue receipts but normally treat as revenue receipts

7.      What is sale of news paper?

As the old newspaper or magazines and other things are disposed off every year, It should be credited in income and expenditure account

8.      Define sale of sports material?

Sale of sports material is a regular function of club, It should be credited in income and expenditure account

9.      What is capital fund?

The difference between total assets over total external liabilities in case of non trading concern is called capital fund. It should not considered in income and expenditure account

10.  What is honorarium?

The amount paid to the person who is not the employee of the organization is said to be honorarium person may be invited to deliver lectures or artists may be invited to give their performance

It should be debited in income and expenditure account