Trust accounitng
This query is : Resolved
03 December 2014
A trust wants to organized blood donation camp, This will required Around Rs 50,000/-. Trust does not have that much amount of money. So one of the trustee is ready to contribute for this fund. Now what will be the accounting for this transaction?
One Effect will be In Capital As Trustee contribution will go in Trust Capital Account.
Second Effect will be In Expenditure Account-As Money utilized for the object of the Trust.
Net Effect will be Loss of Rs 50,000/- in trust income and expenditure account.
Is this effect is correct?
Your advice and suggestion are highly appreciated.
One Effect will be In Capital As Trustee contribution will go in Trust Capital Account.
Second Effect will be In Expenditure Account-As Money utilized for the object of the Trust.
Net Effect will be Loss of Rs 50,000/- in trust income and expenditure account.
Is this effect is correct?
Your advice and suggestion are highly appreciated.
CA R SEETHARAMAN
(Expert)
03 December 2014
Take it as donation from the trustee(revenue). Then the net effect will be zero.
03 December 2014
Is that accounting correct? Because a trust cannot earn from its trustee.Principle of Mutuality will allowed to do so?
CA R SEETHARAMAN
(Expert)
03 December 2014
Trustee and Trust are different persons trustee can donate to trust.
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