In the not-for-profit-making organization, the excess of income over expenditure is
Answer Details
In a not-for-profit-making organization, the excess of income over expenditure is added to the accumulated fund. The accumulated fund represents the organization's reserves, which are set aside to fund future activities and investments.
When a not-for-profit organization earns more money than it spends, it generates a surplus. This surplus can be used to fund future activities, expand the organization's operations, or invest in new projects. However, because not-for-profit organizations do not distribute profits to shareholders, the surplus cannot be distributed as dividends or profits.
Instead, any surplus earned by the organization is added to the accumulated fund. The accumulated fund represents the organization's total reserves, which are made up of all the surpluses generated in previous years. These reserves can be used to fund future activities, investments, or expansions, or they can be used to cover any future losses or unexpected expenses.
In summary, in a not-for-profit-making organization, the excess of income over expenditure is added to the accumulated fund, which represents the organization's reserves and is used to fund future activities and investments.