Question

Donations received for specific purpose are treated as:

• A. Capital
• B. Liability
• C. Revenue Profit
• D. Expense

Hint:

General donation → Revenue receipt; Specific donation → Liability until used for that purpose.

Answer 1

The Correct Option is B

Step 1: Types of donations.
- General donations = revenue receipts, used for general purposes.
- Specific donations (e.g., building fund, sports fund) = used only for that specific purpose.
Step 2: Treatment in accounts.
Specific donations cannot be used freely; they are treated as liabilities until utilised for the specified purpose.
Step 3: Conclude.
Therefore, donations for specific purposes are treated as liabilities.
Final Answer: \[ \boxed{\text{Liability}} \]