Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 2 - No. 36)

If a club's income and expenditure account shows a deficit, what action should be taken?

Transfer the deficit to the receipts and payments account.

Deduct the deficit from the accumulated fund in the statement of financial position.

Add the deficit to the accumulated fund in the statement of financial position.

Ignore the deficit as it is only temporary.

A deficit reduces the accumulated fund.