why tournament expense is a capital expenditure

Dear Student,
FUND BASED ACCOUNTING is an exception to the general rule that all items of revenue or income and expenses are transferres to Income and Expenditure Acccount 

Tournament expenses shall not be shown in the Income and Expenditure Account but  shall be deducted from Tournament Fund on the liabilities side of the Balance Sheet. As it is a specific fund created for specifi purpose.

Regards

 

  • 1
It is not capital expense. Since specific fund is created for it so it should be deducted from tournament fund in Balance Sheet.
  • 1
Because tournament expenses is non recurring.
  • 0
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