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UI Post-UTME Financial Accounting 2025 (Model questions) Question 14

Question 14

Not-for-Profit Organisations

In preparing the income and expenditure account of a non-profit organisation, which of the following items should be EXCLUDED?
I. Surplus from tuck shop sales
II. Life membership fees received
III. Annual subscriptions due but not yet received
IV. Purchase of sports equipment

  1. A.II and IV only
  2. B.I and III only
  3. C.I, II and IV only
  4. D.III and IV only
Show the answer and explanation

Answer: A (II and IV only)

Explanation

Life membership fees are capital receipts and sports equipment is a capital asset; both go to the balance sheet, not the income and expenditure account.