Q.The Receipts and Payments Account of a club for the year ended 31.3.2025 shows ₹1,200 received from sale of old newspapers, and ₹3,500 received from sale of an old table-tennis table having a book value of ₹5,000. Show the treatment of both items in the final accounts of the club.

Small recurring scrap sales are revenue income, but the sale of a fixed asset needs its book value removed and only the profit or loss on sale taken to income.

1. Sale of old newspapers — ₹1,200. This is a small, recurring item of miscellaneous income with no specific asset being written off (old newspapers are not carried in the books as an asset at all). It is treated as a revenue receipt and credited to the Income and Expenditure Account for the year ended 31.3.2025 as 'Sale of Old Newspapers ₹1,200'.
2. Sale of the old table-tennis table — sale proceeds ₹3,500, book value ₹5,000. A fixed asset is recorded in the books at its book value, and this figure — not the sale proceeds — must be removed from the asset account (Sports Equipment/Furniture) so that the Balance Sheet no longer shows an asset the club no longer owns. Loss on sale = Book value − Sale proceeds = 5,000 − 3,500 = ₹1,500. …

Treating the full ₹3,500 sale proceeds of the table-tennis table as income is a frequent mistake — only the profit or loss on sale (the difference between book value and sale proceeds) belongs in the Income and Expenditure Account; the …