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Accounting for Grant

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Ajeet

239 Points Posted on 22 September 2009

In case of trust if we receive a grant from any other person for specific expanses. How should we make entry in our accounts? If that grant remains unutilized then should that entire grant be shown as an income or part of it should be recognized as an income?

Can we create Cost Center in tally for that grant?

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Originally posted by :Ajeet
"	In case of trust if we receive a grant from any other person for specific expanses. How should we make entry in our accounts? If that grant remains unutilized then should that entire grant be shown as an income or part of it should be recognized as an income? Can we create Cost Center in tally for that grant?	"

1. You have to prepare Income & Expenditure account instead of Profit & Loss A/c

2. All Expenses should be shown at expenses side only

3. Income should be booked on pro rata basis means only expended or receipt should be credited as Income and the unutilised grant will be used in income in next year.

4. When you received any amount as grant credit the personal account of person/agency. at the time of year end / project end make a Bill in favour of the funding agency. make the entry by debiting personal account and credit to Income side.