Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 25 - No. 49)
If the club has a deficit, what effect does this have on its accumulated fund?
Increases the accumulated fund.
Has no effect on the accumulated fund.
Decreases the accumulated fund.
Becomes a liability.
Explanation
A deficit means the club's expenses exceeded its income, which reduces the club's net worth (the accumulated fund).
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