1
Question
State the meaning of
'Not-for-Profit' Organisations.
State the meaning of 'Not-for-Profit' Organisations.
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Solution
Not-for-Profit
Organisations (NPO) are set up with the prime objective of providing
services and not to earn profit thereby enhancing the welfare of
society. Such organisations include schools, hospitals, trade unions,
religious organisations, etc. The person/s or the groups of
individuals who govern and manage the working of an NPO are known as
trustees. NPO's main sources of income are donations, subscriptions,
life membership fees, grants etc. As these organisations are not set
up with profit motive, they do not prepare Trading and Profit and
Loss Account. Instead, they maintain Receipt and Payments Account,
Income and Expenditure Account and Balance Sheet.
Not-for-Profit Organisations (NPO) are set up with the prime objective of providing services and not to earn profit thereby enhancing the welfare of society. Such organisations include schools, hospitals, trade unions, religious organisations, etc. The person/s or the groups of individuals who govern and manage the working of an NPO are known as trustees. NPO's main sources of income are donations, subscriptions, life membership fees, grants etc. As these organisations are not set up with profit motive, they do not prepare Trading and Profit and Loss Account. Instead, they maintain Receipt and Payments Account, Income and Expenditure Account and Balance Sheet.
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