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Write short notes :Specific purpose fund |
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Answer» The amount received for specific purpose is credited to the fund account for which it is received and not to the capital fund account. For e.g., Fund for building, President’s felicitation fund, Fund for prizes, etc. If funds are received for specific purpose then all the expenses relating to the fund are subtracted from the fund. For e.g., if fund is received for prizes, then all expenses relating to prizes are subtracted from the prize fund. The expenses of prize fund are not shown in the Income and Expenditure Account. If thie amount of the fund is invested in specific securities then interest received on such investments are not credited to Income and Expenditure Account but the amount of interest received is added to the respective fund. If expense incurred is more than the specifice fund amount, the amount of difference is treated as revenue expense and debited to the Income and Expenditure Account. |
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