PRC-3 · Chapter 2 · Question 36 of 61
A local recreational club collects annual subscriptions from its members to maintain sports facilities and host community events. Instead of a traditional profit and loss account, what financial statement does this club produce?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) An income and expenditure account
Explanation
Not-for-profit organizations, such as clubs and societies, produce an income and expenditure account to show their surplus or deficit rather than a profit and loss account.
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