What is meant by caution money ? And what is the point of verifying the F.S.T through fund based accounting ( Audit of Education Institution )

1 answer

Ravi Staff January 21, 2019

Deposits / Extra Money taken from students as safety, so that if they damage anything deductions can be done for damages, such sum is called caution money. Auditor should ensure that it is not treated as income and it is refunded only after adjusting damages , penalties if any.
Education institutions may get money or allocate money for specific purpose, which is called as fund. Separate statement of fund  explaining additions and utilisation for each fund should be made. It is called fund based accounting, it is good for supervision and decision making by governing body. 

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