Question

The accounting information provided by such organisations is meant for the _______ and potential contributors meet the statutory requirement.

• A. Past
• B. Present
• C. Future
• D. None of the above

Answer 1

The correct option is B Present

Not-for-Profit organisations refer to the organisations that are used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aim is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase or sell goods and may not have credit transactions. Hence, they need not maintain many books of account (as the trading concerns do) and Trading and Profit and Loss Account. The funds raised by such organisations are credited to capital fund or general fund. The major sources of their income usually are subscriptions from their members, donations, grants-in-aid, income from investments, etc.

The main characteristic of such organisation is the accounting information provided by such organisations is meant for the present and potential contributors and to meet the statutory requirement.