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WAEC Financial Accounting 2009 Question 23

Question 23

Not-for-Profit Organisations

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

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

Answer: B (added to accumulated fund)

Explanation

A club has an accumulated fund instead of capital, and a surplus is added to it.