Treatment of Special Items:

Subscriptions from members are collected periodically. These are regular

revenue incomes and credited to Income and Expenditure Account. These
are the major source of income for the non-trading concern. However,
special subscriptions, if collected are kept separately from the General Fund
for the specific purpose.

There are certain items which are peculiar to non-trading

concerns and they need special treatment and are:
(b)Donations:
Charitable institution may receive donations from time to time. If the
amount is small and if such collections are frequent, then they may be
treated as an income. Donations may also be of two types— General
Donations and Specific Donations. Any donations received, not for a
specific purpose, are treated as General Donations.

The General Donations of comparatively small amount may be taken to

Income and Expenditure Account. General Donations of comparatively
huge amount, which are of non-recurring nature, may be added to the
Capital Fund. The nature and size of the organisation decide about the
amount of donation being small or big.

In case of donations received for any specific purpose then it is termed

Specific Donations. Such amount cannot be used for any other purpose,
except the purpose of donor. Therefore, such amount may be shown in
Balance Sheet (liability side).

All the Donations debited to Receipts and Payments Account and these
amounts may be credited to Income and Expenditure Account or Liability
side of the Balance Sheet, if it is for a specific purpose.
(d) Legacy:
It is like donation. It is the amount given to a non-trading concern as per
the will of deceased person. It is taken to the Receipts and Payments
Account as Capital Receipts. These are not income but may appear in
Balance Sheet. These types of receipts are of non-recurring nature.

(e) Life Members Fee:

Non-trading concerns usually collect subscriptions every month from their
ordinary members. There are another category of members called “Life
Members”, from whom the subscriptions are collected as a lump sum.

Such subscriptions are called life subscription and are capital receipts. This
can also be kept in a separate account and an amount equal to annual
subscription can be transferred to subscription account. The balance in
such account, on the death of the member must be transferred to Capital
Fund

(c) Tournament Fund:

If there is any specific fund, such as Tournament Fund, the expenses or
incomes relating to the fund may be adjusted to the fund itself (on the
liability side of the Balance Sheet). Such expenses or incomes may not be
taken to Income and Expenditure Account.