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(D)

Life membership fees received by a club is
A. Revenue receipt
(B)
(C) Both (A) and (B)
(D)
Capital receipt
None of these​

User BSchlinker
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1 Answer

3 votes

Answer:

(D) Capital receipt

Step-by-step explanation:

The life membership fee is a one-time lump sum amount paid by a new member. It gives a member access to the club facilities for the rest of their lives. Life membership is treated as a capital receipt and added to the capital fund. It appears on the liabilities side in the balance sheet.

Life membership is not treated as income for a particular year because the one-time payments permit a member lifetime access to the club services.

User Hozeis
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