Question

Although income and expenditure account prepared by a not for profit organisation and profit and loss account prepared by an enterprise on the same principles of accounting why is it that in the case of non for profit organisation it is termed as income and expenditure account?

Answer 1

Dear Student,

​​​​​​Both profit & loss a/c and income & expenditure a/c are prepared on the same principle but in case of a not-for-profit organisation,
the main objective is not to earn profit and so that account is only prepared to know the income and expenditures of the organisation.
So,it is known as Income and expenditure account.

Regards