(a) From the following Receipts and Payments account, prepare Income and Expenditure account of Kumbakonam Basket Ball Association for the year ended 31st March, 2018. | Receipts | ₹ | ₹ | Payments | ₹ | ₹ | | --- | --- | --- | --- | --- | --- | | To Balance b/d | | | By Rent of ground paid | | 12,000 | | Cash in hand | 23,000 | | By Printing charges | | 5,000 | | Cash at bank | 12,000 | 35,000 | By Bank charges | | 1,000 | | To Rent of hall received | | 6,000 | By Insurance for building | | 2,000 | | To Subscription received | | 9,000 | By Tournament expenses | | 16,000 | | To Life membership fees | | 7,000 | By Audit fees | | 3,000 | | To Locker rent received | | 2,000 | By Sports materials purchased | | 4,000 | | | | | By Balance c/d | | | | | | | Cash in hand | 2,000 | | | | | | Cash at bank | 14,000 | 16,000 | | | | 59,000 | | | 59,000 | OR (b) From the following particulars, prepare Comparative Statement of financial position of Muthu Ltd. | Particulars | 31st March, 2017 (₹) | 31st March, 2018 (₹) | | --- | --- | --- | | I. EQUITY AND LIABILITIES | | | | Shareholders' Fund | 4,00,000 | 4,40,000 | | Non-Current Liabilities | 1,50,000 | 1,65,000 | | Current Liabilities | 75,000 | 82,500 | | Total | 6,25,000 | 6,87,500 | | II. ASSETS | | | | Non-current assets | 5,00,000 | 6,00,000 | | Current assets | 1,25,000 | 87,500 | | Total | 6,25,000 | 6,87,500 |

> > [!TLDR] > (a) Income & Expenditure A/c shows a **deficit (excess of expenditure over income) of ₹26,000**. (b) Comparative statement: overall totals up 10%; Non-current assets +20%, Current assets −30%. > > ## (a) Income and Expenditure A/c — Kumbakonam Basket Ball Association (year ended 31.3.2018) > > Rules applied: exclude the opening/closing cash & bank balances (capital), and treat **Life membership fees ₹7,000 as a capital receipt** (added to capital fund, not income). All other receipts are current-year incomes and all payments are current-year expenditure (no stock/asset adjustment is given for sports materials, so it is charged as revenue expenditure). > > | Expenditure | ₹ | Income | ₹ | > | --- | --- | --- | --- | > | To Rent of ground paid | 12,000 | By Rent of hall received | 6,000 | > | To Printing charges | 5,000 | By Subscription received | 9,000 | > | To Bank charges | 1,000 | By Locker rent received | 2,000 | > | To Insurance for building | 2,000 | | | > | To Tournament expenses | 16,000 | | | > | To Audit fees | 3,000 | By Excess of expenditure over income (deficit) | 26,000 | > | To Sports materials purchased | 4,000 | | | > | **Total** | **43,000** | **Total** | **43,000** | > > Deficit = Total expenditure 43,000 − Total income 17,000 = **₹26,000**. > > ## (b) Comparative Statement of Financial Position — Muthu Ltd. > > Absolute change = 2018 − 2017; Percentage change = (Absolute change ÷ 2017) × 100. > > | Particulars | 31.3.2017 (₹) | 31.3.2018 (₹) | Absolute change (₹) | % change | > | --- | --- | --- | --- | --- | > | **I. EQUITY AND LIABILITIES** | | | | | …

(a) From the following Receipts and Payments account, prepare Income and Expenditure account of Kumbakonam Bas

Question 37 of 48

(a) From the following Receipts and Payments account, prepare Income and Expenditure account of Kumbakonam Basket Ball Association for the year ended 31st March, 2018.

Receipts	₹	₹	Payments	₹	₹
To Balance b/d			By Rent of ground paid		12,000
Cash in hand	23,000		By Printing charges		5,000
Cash at bank	12,000	35,000	By Bank charges		1,000
To Rent of hall received		6,000	By Insurance for building		2,000
To Subscription received		9,000	By Tournament expenses		16,000
To Life membership fees		7,000	By Audit fees		3,000
To Locker rent received		2,000	By Sports materials purchased		4,000
			By Balance c/d
			Cash in hand	2,000
			Cash at bank	14,000	16,000
		59,000			59,000

(b) From the following particulars, prepare Comparative Statement of financial position of Muthu Ltd.

Particulars	31st March, 2017 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
Shareholders' Fund	4,00,000	4,40,000
Non-Current Liabilities	1,50,000	1,65,000
Current Liabilities	75,000	82,500
Total	6,25,000	6,87,500
II. ASSETS
Non-current assets	5,00,000	6,00,000
Current assets	1,25,000	87,500
Total	6,25,000	6,87,500

Tamil Nadu DgeTamil Nadu HSC (DGE) Commerce Board 2024Subjective· 5mImportance★★★★★

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Concept understanding — Income and Expenditure Account

An Income and Expenditure Account is the not-for-profit organisation's equivalent of a Profit & Loss Account: a nominal account prepared on the accrual basis that records only revenue incomes and expenses of the current period, and whose balance is a surplus (excess of income over expenditure) or deficit rather than profit or loss.

Convert the cash-based Receipts & Payments Account into the accrual-based Income & Expenditure Account by removing all capital items and all items of other periods, then adjusting current-period incomes/expenses for outstanding and prepaid amounts.

How it differs from Receipts & Payments

Receipts & Payments A/c = a summarised cash book: all cash received/paid, capital or revenue, current year or not.
Income & Expenditure A/c = only revenue items of the current year on accrual basis; capital receipts (donations for building, legacies, sale of assets) and capital payments (buying assets) are excluded and go to the Balance Sheet.

Preparing it (the adjustments)

Start from receipts/payments and apply accrual adjustments:

Adjustment	Treatment
Subscriptions received	+ outstanding for this year, − received in advance, − last year's arrears now received
Expenses paid	+ outstanding, − prepaid
Depreciation on assets	Debit (non-cash expense)
Bad debts / provisions	Debit

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(a) Income & Expenditure A/c shows a deficit (excess of expenditure over income) of ₹26,000. (b) Comparative statement: overall totals up 10%; Non-current assets +20%, Current assets −30%.

(a) Income and Expenditure A/c — Kumbakonam Basket Ball Association (year ended 31.3.2018)

Rules applied: exclude the opening/closing cash & bank balances (capital), and treat Life membership fees ₹7,000 as a capital receipt (added to capital fund, not income). All other receipts are current-year incomes and all payments are current-year expenditure (no stock/asset adjustment is given for sports materials, so it is charged as revenue expenditure).

Expenditure	₹	Income	₹
To Rent of ground paid	12,000	By Rent of hall received	6,000
To Printing charges	5,000	By Subscription received	9,000
To Bank charges	1,000	By Locker rent received	2,000
To Insurance for building	2,000
To Tournament expenses	16,000
To Audit fees	3,000	By Excess of expenditure over income (deficit)	26,000
To Sports materials purchased	4,000
Total	43,000	Total	43,000

Deficit = Total expenditure 43,000 − Total income 17,000 = ₹26,000.

(b) Comparative Statement of Financial Position — Muthu Ltd.

Absolute change = 2018 − 2017; Percentage change = (Absolute change ÷ 2017) × 100.

Particulars	31.3.2017 (₹)	31.3.2018 (₹)	Absolute change (₹)	% change
I. EQUITY AND LIABILITIES

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

Showing the 12 most recent of 13 on this concept.

CBSE 2026Set ANNUAL1 mark
$Q. Complete the table: Income Expenditure Deficit 25,000 .......... 2,000$
›Reveal solutionSolution

Expenditure = ₹27,000. A deficit is the excess of expenditure over income, so Expenditure = Income + Deficit.

Method

The Income and Expenditure Account of a not-for-profit concern shows a deficit when total expenditure exceeds total income. Therefore:

Deficit = Expenditure − Income

Re-arranging: Expenditure = Income + Deficit

| Item | Amount (₹) | …

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CBSE 2026Set ANNUAL1 mark
$Q. Write the word/phrase/term, which can substitute the following sentence. An account which records only revenue items in the case of a not-for-profit concern.$
›Reveal solutionSolution
The account that records only revenue items of a not-for-profit concern is the Income and Expenditure Account.

A not-for-profit concern (club, school, hospital, trust) does not prepare a Profit and Loss Account. Instead it prepares an Income and Expenditure Account, which is a nominal account resembling a Profit and Loss Account:

It is prepared on the accrual basis and includes only revenue (recurring, current-period) incomes and expenses. …
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CBSE 2025Set ANNUAL1 markMCQ
$Q. Excess of income over expenditure in ‘Not for Profit Concern’ is termed as ______.$
(a) Deficit
(b) Profit
(c) Surplus
(d) Loss
›Reveal solutionSolution

The answer is Surplus.

A Not for Profit Concern (club, school, hospital, trust) does not trade to earn profit, so it prepares an Income and Expenditure Account rather than a Profit and Loss Account. The balancing figure of this account is described in special terms:

Situation Term used
Income greater than Expenditure Surplus
Expenditure greater than Income Deficit
…

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CBSE 2025Set ANNUAL1 mark
$Q. Income and Expenditure Account is a ______ account.$
›Reveal solutionSolution

The answer is Nominal.

Accounts are classified as Personal, Real or Nominal. Nominal accounts deal with incomes, gains, expenses and losses. The Income and Expenditure Account of a Not for Profit concern records:

Debit side Credit side
Revenue expenses & losses Revenue incomes & gains
…

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CBSE 2025Set MARCH1 markMCQ
$Q. Income and Expenditure account is a :$
(a) Representative Personal A/c
(b) Real A/c
(c) Personal A/c
(d) Nominal A/c
›Reveal solutionSolution

The Income and Expenditure Account is a Nominal Account.

The Income and Expenditure Account is prepared by not-for-profit organisations (TN HSC Commerce) to record all revenue incomes and revenue expenses relating to the current period, ending in a surplus or deficit. Because it deals only with items of income and expense — not with persons or property — it falls under the class …

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CBSE 2024Set ANNUAL1 markMCQ
$Q. Find the odd one:$
(a) Audit Fees
(b) Insurance
(c) Medical Expenses
(d) Sundry Receipts
›Reveal solutionSolution

Three items are expenses; one is an income/receipt. The income item is the odd one.

In the Income and Expenditure Account of a not-for-profit concern the items fall on opposite sides:

Item Nature Side of I&E A/c
Audit Fees Expense Debit (Expenditure)
Insurance Expense Debit (Expenditure)
Medical Expenses Expense Debit (Expenditure)
Sundry Receipts Income Credit (Income)
…

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CBSE 2024Set ANNUAL1 markMCQ
$Q. Income and Expenditure Account is a ________ Account.$
(a) Capital account
(b) Real account
(c) Personal account
(d) Nominal account
›Reveal solutionSolution
The Income and Expenditure Account of a not-for-profit concern is a Nominal Account — it is the equivalent of a Profit and Loss Account and records only revenue items.

A not-for-profit concern prepares an Income and Expenditure Account to find its surplus (excess of income over expenditure) or deficit. Because it deals only with revenue incomes and revenue expenses of the current year, it follows the golden rule of nominal accounts:

Debit all expenses and losses.

Credit all incomes and gains. …
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CBSE 2024Set ANNUAL1 mark
$Q. Write the word/phrase/term which can substitute of the following statement: The debit balance of Income and Expenditure Account.$
›Reveal solutionSolution
The debit balance of the Income and Expenditure Account represents the Deficit — the excess of expenditure over income.

At the year-end the Income and Expenditure Account is balanced:

If income exceeds expenditure, the credit balance is a Surplus. …
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CBSE 2024Set MARCH1 markMCQ
$Q. Income and Expenditure Account is prepared to find out :$
(a) Surplus or deficit
(b) Profit or loss
(c) Financial position
(d) Cash and Bank balance
›Reveal solutionSolution
The Income and Expenditure Account is prepared to find the surplus or deficit of a not-for-profit organisation — option (a).

Not-for-profit organisations (clubs, societies, hospitals, schools) do not trade to earn profit, so they do not prepare a Profit and Loss Account. Instead they prepare an Income and Expenditure Account, which is a nominal account maintained on the accrual basis:

All revenue incomes of the year (whether received or not) are credited.

All revenue expenses of the year (whether paid or not) are debited.

The balancing figure is a surplus (income exceeds expenditure) or a deficit (expenditure exceeds income). …
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CBSE 2023Set ANNUAL1 markMCQ
$Q. Income and Expenditure Account is a ________ Account.$
(a) Capital
(b) Real
(c) Personal
(d) Nominal
›Reveal solutionSolution
The correct option is Nominal. The Income and Expenditure Account is prepared by a not-for-profit concern on the same lines as a Profit & Loss Account; it is a Nominal account that records all revenue incomes and expenses of the year and reveals the surplus (excess of income over expenditure) or deficit.

Explanation

Nominal accounts are accounts of incomes, gains, expenses and losses. …
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CBSE 2022Set ANNUAL1 mark
$Q. Aurangabad University prepares _______ Account instead of Profit and Loss Account.$
›Reveal solutionSolution

The blank is Income and Expenditure Account.

A university, like a club or a charitable trust, is a not-for-profit organisation whose objective is service, not profit. Such concerns do not prepare a Profit and Loss Account; instead they prepare an Income and Expenditure Account, which records all revenue incomes and revenue expenditures of the period on an accrual basis. Its balancing figure is a surplus (excess …

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CBSE 2022Set MARCH1 markMCQ
$Q. Income and Expenditure Account is prepared to find out :$
(a) surplus or deficit
(b) profit or loss
(c) financial position
(d) cash and bank balance
›Reveal solutionSolution
The Income and Expenditure Account reveals the surplus or deficit of a not-for-profit organisation.

In the Tamil Nadu HSC Class-12 Accountancy syllabus, not-for-profit organisations (clubs, societies, hospitals) do not aim to earn profit, so they prepare an Income and Expenditure Account instead of a Profit and Loss Account. It records only revenue incomes and revenue expenditures of the current period on an accrual basis.

Excess of income over expenditure = surplus.

Excess of expenditure over income = deficit. …
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Income	Expenditure	Deficit
25,000	..........	2,000

Situation	Term used
Income greater than Expenditure	Surplus
Expenditure greater than Income	Deficit
…

Debit side	Credit side
Revenue expenses & losses	Revenue incomes & gains
…

Item	Nature	Side of I&E A/c
Audit Fees	Expense	Debit (Expenditure)
Insurance	Expense	Debit (Expenditure)
Medical Expenses	Expense	Debit (Expenditure)
Sundry Receipts	Income	Credit (Income)
…

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(a) Income and Expenditure A/c — Kumbakonam Basket Ball Association (year ended 31.3.2018)

(b) Comparative Statement of Financial Position — Muthu Ltd.

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