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JAMB Principles of Accounts 2001 Question 32

Question 32

Not-for-Profit Organisations

The excess of income over expenditure is usually transferred to the

  1. A.accumulated fund
  2. B.profit and loss account
  3. C.current assets in the balance sheet
  4. D.current liabilities in the balance sheet.
Show the answer and explanation

Answer: A (accumulated fund)

Explanation

A club's surplus is added to its accumulated fund, as a firm's profit is added to capital.