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JAMB Principles of Accounts 2005 Question 35

Question 35

Not-for-Profit Organisations

Gamji Memorial Club carried out an activity which yielded a profit of ₦10 000. This amount is to be transferred to the

  1. A.debit side of its profit and loss account
  2. B.credit side of its profit and loss account
  3. C.debit side of its income and expenditure account
  4. D.credit side of its income and expenditure account
Show the answer and explanation

Answer: D (credit side of its income and expenditure account)

Explanation

A club has no profit and loss account; profit from an activity is income, credited to the income and expenditure account.