Distinguish between a General Donation and a Specific Donation. How is a Legacy treated in the accounts of a Not for Profit concern?

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**General Donation vs. Specific Donation**

| Basis | General Donation | Specific Donation |
|---|---|---|
| Meaning | A donation received with no condition on how it is spent | A donation received for a stated, specific purpose |
| Nature | Revenue receipt | Capital receipt |
| Treatment | Credited in full to the Income and Expenditure Account | Shown directly on the liabilities side of the Balance Sheet (as a separate fund, or added to the Capital Fund) |
| Example | A member's donation for the club's general running expenses | A donation received specifically "for constructing a new pavilion" |

An unusually large general donation may sometimes be capitalised instead of being credited to the Income and Expenditure Account, but only where the question specifically instructs this — the default treatment for an ordinary general donation is still revenue income.

**Treatment of a Legacy** …

Q.Distinguish between a General Donation and a Specific Donation. How is a Legacy treated in the accounts of a Not for Profit concern?

Concept understanding — Treatment of Subscriptions, Donations, Legacies, Entrance Fees and Life Membership Fees

Basis	General Donation	Specific Donation
Meaning	A donation received with no condition on how it is spent	A donation received for a stated, specific purpose
Nature	Revenue receipt	Capital receipt
Treatment	Credited in full to the Income and Expenditure Account	Shown directly on the liabilities side of the Balance Sheet (as a separate fund, or added to the Capital Fund)
Example	A member's donation for the club's general running expenses	A donation received specifically "for constructing a new pavilion"

Q.Distinguish between a General Donation and a Specific Donation. How is a Legacy treated in the accounts of a Not for Profit concern?

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