Accounting JAMB

The accumulated fund of a non-trading concern can equally be referred to as?

A. members equity
B. share capital
C. general fund
D. surplus fund

Correct Answer:

Option C – general fund

Explanation

An accumulated fund is the capital fund of a nonprofit organization. Money is directed into the accumulated fund when revenues are greater than expenditures and there is a budgetary surplus. Capital fund (also known as general fund and accumulated fund) is a balance sheet item that represents the surplus of assets over liabilities of non-trading concerns. In other words, we can say that the capital fund of non-profit organizations is equivalent to the capital of for-profit organizations. It increases as a result of surplus and decreases as a result of deficit computed by preparing an income and expenditure account.

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