Q.How would you treat the following items while preparing the final accounts of a Not for Profit concern?

Both items involve 'selling something old', but one is a routine, recurring income item and the other involves disposing of a fixed asset — and the two are treated quite differently.

1. Sale of Old Newspapers The sale of old newspapers, old periodicals, or unusable old sports material is a small, recurring item of income that arises naturally from the concern's day-to-day activities. It is treated as revenue income and credited in full to the Income and Expenditure Account for the year in which it is received.
2. Sale of an Old Fixed Asset (e.g. old furniture) Selling a fixed asset is a capital transaction, not a revenue one — the full sale proceeds are never credited to the Income and Expenditure Account. Instead:

• The asset is removed from the Balance Sheet at its book value (original cost less depreciation charged to date).
• Only the profit or loss on sale — the difference between the sale proceeds actually received and the asset's book value at the time of sale — is transferred to the Income and Expenditure Account (credited if a profit, debited if a loss). …

A common error is crediting the FULL sale proceeds of an old fixed asset to the Income and Expenditure Account, exactly as one would for sale of old newspapers — for a fixed asset, only the PROFIT OR LOSS on sale (proceeds minus book value) belongs in the Income an …