Accounting for Not-for-Profit Organisation
Not-for-Profit Organisations are the establishments that are for utilised for the welfare of the community and are set up as charitable associations which operate without any motive for profit. Their primary objective is to provide service to a specific class or the public. Usually, they do not produce, buy or sell commodities and may not have credit transactions.
Therefore, they need not manage many books of account (as the trading entities do) and Trading and Profit & Loss Account. The funds raised by such establishments are credited to the general fund or capital fund. The major sources of their income usually are subscriptions, member’s donations, income from investments, grants-in-aids from government etc.
Let us now understand each concept of Accounting for Not-for-Profit Organisation in detail.
- Meaning and Characteristics of Not-for-Profit Organisation
- Accounting Records of Not-for-Profit Organisations
- Receipt and Payment Account
- Income and Expenditure Account
- Balance Sheet
- Some Peculiar Items
- Income and Expenditure Account based on Trial Balance
- Incidental Trading Activity
This is also a legitimate requirement and assists them to keep an eye on their income and expenditure, the trait of which is distinct from those of the business establishments.
The above mentioned is the concept that is explained in detail about Accounting for Not-for-Profit Organisation for the Class 12 students. To know more, stay tuned to BYJU’S.