NPO
Dear Student
Following Fund based Accounting :
From the questions , All the Items (Income or Expense) related to Prizes will be accounted through Prize fund A/c.
Therefore Treatment if all the accounts would be as follows :
Prize Fund : Shown in Liability Side of Balance sheet.
Investment of Prize fund in Securities : Shown in Asset side.
Interest on Prize fund Investment : Would be added to Prize fund A/c .
Prize awarded : Would be reduced from Prize Fund A/c.
| Extract of Balancesheet | |||||
| Liabilities | Amount | Assets | Amount | ||
| (Rs) | (Rs) | ||||
| Prize Fund | 80,000 | Prize Fund Investment | 80,000 | ||
| Add : Income on Prize fund investment | 8,000 | ||||
| Less : Prize awarded | 6,000 | ||||
| 82,000 | |||||
Regards