Accounting

LEGACY:
Legacy refers to property received by virtue of a will of a person after his death. Acquisition of such property by an institution is regarded as capital receipt. Hence it will not appear in Income & Expenditure Account. Properties or cash received on account of Legacy is shown on asset side on the balance sheet on one hand and on the other hand it is added to the capital fund account on the liabilities side of the balance sheet.
9. LIFE MEMBERSHIP FEE:
In some institutions one may become a life member by paying a lump sum at a tune - he is not required to pay monthly or annual subscription. So life membership fee is in effect regular subscription paid in advance. The subscriptions collected from the members are utilized for rendering services to them, so it is revenue income. If, however, there is any stipulation in the bye-laws of the institution, it must be observed, if it is stipulated that life membership fee will be regarded as capital income, it cannot be included in income and expenditure account, it will be credited to capital fund account and shown on the liabilities side of balance sheet as an addition to that fund. Again, it may be stipulated that admission fee i$j to be regarded partly as capital and partly revenue.
10. DONATION:
Sometimes institution like Club, Hospital etc. collect donation from members and general pubbcj "Whether such donation is to be treated as capital or revenue depends upon the purpose for which donation is collected. If the donation is collected for any special purpose, it must be treated as capital credited to a special fund account and shown on Liabilities side of Balance Sheet, e.g., Building Fi Charity Fund, Prize Fund etc. On the other hand, if the donation is collected not for any special purpose, i is treated as revenue and credited to Income & Expenditure Account.
11. CAPITAL FUND:Any concern - whether profit-seeking or non-profit-seeking - requires money for conducting da> day functions. In the case of profit-seeking concerns such money is called Capital, while in the case non-profit-seeking concerns it is called Capital Fund. The excess of total assets over total exte liabilities of a concern is called Capital Fund. Capital Fund is created with surplus revenue and ca; receipts and incomes, such as surplus (excess of income over expenditure). Donation, Life Member Fee, Admission Fee, Profit on Sale of Fixed Assets etc. It is also called General Fund or Accumi Fund or surplus Account. It is shown on Liabilities side of Balance Sheet as the first item. In prae Capital Fund is the capital of a non profit-seeking concern