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JAMB Principles of Accounts 2010 Question 30

Question 30

Not-for-Profit Organisations

In the not-for-profit-making organization, the excess of income over expenditure is

  1. A.deducted from the capital
  2. B.added to the accumulated fund
  3. C.added to the capital
  4. D.deducted from the accumulated fund.
Show the answer and explanation

Answer: B (added to the accumulated fund)

Explanation

A club's surplus increases its accumulated fund (its 'capital').