explain capital fund,legacy,specific donation
Dear Student
Capital Funds are those funds which are kept aside for the purchase of assets like land, equipment etc. These funds are maintained out of the surplus made by an organization.
Legacy - When a person through his will names his property for a Not-for-Profit organization, its called legacy. It is added to the capital fund in the balance sheet.
However, this is a type of Donation. If owner specifies its use then it is treated as a Specific donation and added to the Capital Fund in the Closing Balance Sheet.
On the other hand, if its use has not been specified by the owner then it is treated as General Donation, therefore, shown on the Receipt side of Income and Expenditure A/c.
Specific Donation - Specific donation means the amount received with some specific conditions attached for its use. Thus, when the donation amount is received for some specific purpose, then it is termed as a specific donation. For example, donation received for construction of canteen, building, pavilion, etc.
Regards
Capital Funds are those funds which are kept aside for the purchase of assets like land, equipment etc. These funds are maintained out of the surplus made by an organization.
Legacy - When a person through his will names his property for a Not-for-Profit organization, its called legacy. It is added to the capital fund in the balance sheet.
However, this is a type of Donation. If owner specifies its use then it is treated as a Specific donation and added to the Capital Fund in the Closing Balance Sheet.
On the other hand, if its use has not been specified by the owner then it is treated as General Donation, therefore, shown on the Receipt side of Income and Expenditure A/c.
Specific Donation - Specific donation means the amount received with some specific conditions attached for its use. Thus, when the donation amount is received for some specific purpose, then it is termed as a specific donation. For example, donation received for construction of canteen, building, pavilion, etc.
Regards