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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Endowment Fund is recorded only in the Balance Sheet.
Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheet
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
Endowment fund arises from bequest or gift, the income generated from it is utilized for the specific purpose while the original amount is kept intact other forever for a specific period. It is shown on the liabilities side of the balance sheet.
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Directions : In the following questions, a statement of Assertion (A)...
**Assertion (A):** Endowment Fund is recorded only in the Balance Sheet.
**Reason (R):** Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheet.
The correct answer is option 'A' - Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
**Endowment Fund**
- An endowment fund is a type of long-term investment fund that is established by a nonprofit organization, such as a university, hospital, or charitable foundation.
- The purpose of an endowment fund is to provide a permanent source of income for the organization, with the principal amount invested and only a portion of the investment income used for the organization's expenses or charitable activities.
- Endowment funds are meant to be held indefinitely, with the goal of preserving the principal amount and generating income to support the organization's operations or mission.
**Recording of Endowment Fund**
- The endowment fund is recorded in the financial statements of the organization, specifically in the balance sheet.
- The balance sheet is a financial statement that provides a snapshot of an organization's financial position at a specific point in time.
- It presents the organization's assets, liabilities, and equity, showing what it owns, what it owes, and the net worth of the organization.
- In the balance sheet, the endowment fund is treated as a liability of the organization.
- This is because the endowment fund represents funds that have been donated to the organization, and the organization has an obligation to use these funds in accordance with the donor's wishes.
- As a liability, the endowment fund is shown on the liabilities side of the balance sheet, along with other obligations of the organization.
**Reason for recording the Endowment Fund as a liability**
- The reason for treating the endowment fund as a liability is that it represents funds that have been received by the organization but are not available for immediate use.
- These funds are typically invested in various financial instruments, such as stocks, bonds, or real estate, with the expectation that they will generate income over time.
- The income generated by the endowment fund can then be used to support the organization's activities, such as funding scholarships, research programs, or other charitable initiatives.
- However, the principal amount of the endowment fund is not intended to be spent, as it is meant to be preserved and provide a perpetual source of income for the organization.
- Therefore, the endowment fund is recorded as a liability in the balance sheet to reflect the organization's obligation to use these funds in accordance with the donor's wishes.
In conclusion, the Assertion (A) that the endowment fund is recorded only in the balance sheet is true. The Reason (R) provided, that the endowment is treated as a capital receipt and shown on the liabilities side of the balance sheet, is the correct explanation of Assertion (A).
**Reason (R):** Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheet.
The correct answer is option 'A' - Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Explanation:
**Endowment Fund**
- An endowment fund is a type of long-term investment fund that is established by a nonprofit organization, such as a university, hospital, or charitable foundation.
- The purpose of an endowment fund is to provide a permanent source of income for the organization, with the principal amount invested and only a portion of the investment income used for the organization's expenses or charitable activities.
- Endowment funds are meant to be held indefinitely, with the goal of preserving the principal amount and generating income to support the organization's operations or mission.
**Recording of Endowment Fund**
- The endowment fund is recorded in the financial statements of the organization, specifically in the balance sheet.
- The balance sheet is a financial statement that provides a snapshot of an organization's financial position at a specific point in time.
- It presents the organization's assets, liabilities, and equity, showing what it owns, what it owes, and the net worth of the organization.
- In the balance sheet, the endowment fund is treated as a liability of the organization.
- This is because the endowment fund represents funds that have been donated to the organization, and the organization has an obligation to use these funds in accordance with the donor's wishes.
- As a liability, the endowment fund is shown on the liabilities side of the balance sheet, along with other obligations of the organization.
**Reason for recording the Endowment Fund as a liability**
- The reason for treating the endowment fund as a liability is that it represents funds that have been received by the organization but are not available for immediate use.
- These funds are typically invested in various financial instruments, such as stocks, bonds, or real estate, with the expectation that they will generate income over time.
- The income generated by the endowment fund can then be used to support the organization's activities, such as funding scholarships, research programs, or other charitable initiatives.
- However, the principal amount of the endowment fund is not intended to be spent, as it is meant to be preserved and provide a perpetual source of income for the organization.
- Therefore, the endowment fund is recorded as a liability in the balance sheet to reflect the organization's obligation to use these funds in accordance with the donor's wishes.
In conclusion, the Assertion (A) that the endowment fund is recorded only in the balance sheet is true. The Reason (R) provided, that the endowment is treated as a capital receipt and shown on the liabilities side of the balance sheet, is the correct explanation of Assertion (A).
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Endowment Fund is recorded only in the Balance Sheet.Reason (R): Endowment is treated as capital receipt hence shown on the liabilities side of Balance Sheeta)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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