2. INTRODUCTION
•The different organizations can be divided into
two groups - PROFIT ORGANISATION
- NON PROFIT ORGANISATION
• The Non Profit Organisation is an organisation
which serve community interest rather than self
individual interest.
• These organizations are found to meet some
socially desirable goals such as promotion of
art ,culture and education etc.
3. MEANING AND DEFINITION
The Non Profit Organisations are those whose
objective is to provide service to their
members or society as a whole irrespective of
caste, creed and religion. It is also known as
Not For Profit Organisation.
"An institution in which no stockholder or
trustee shares in profits or losses or not to earn
revenue but to exist to promote a mission that
enhancesthe public welfare."
EXAMPLES OF NPO-- Hospitals, Educational
institutions, Religious Institutions, Political
Associations, Charitable trust etc.
4. CHARACTERISTICS OF NPO
Service Motive: They provide services to the
society free of cost or at a bare minimum price
as their aim is not to earn the profit.
Objective: It's main objective is to serve
community interest rather than self individual
interest.
Source of Income: The major sources of income
of not-for-profit organisations are subscriptions,
donations, government grants, legacies, income
from investments, etc
Surplus: The surplus is added in the capital fund
rather than distribution among its members.
5. DIFFERENCES BETWEEN PROFIT
ORGANISATION AND NON PROFIT
ORGANISATION
Basis of difference Non profit
organizations
Profit organizations
Objective Services to its
members and society
Earning profits
Sources of funds Donations,
subscriptions etc.
Profits and loans from
financial institutions
Financial accounts •Receipt and payment
account
•Income and
expenditure account
•Balance sheet
• Trading and profit
and loss account
• Balance sheet
Surplus/ Profit It shows either surplus
or deficit
It shows either profit
or loss
6.
7. RECIEPT AND PAYMENT
ACCOUNT
1. It is a real account.
2. It starts with openingbalance of cash and
bank balance on the debit side and ends with the
closing balance of cash and bank balance on
credit side.
3. It has 2 sides Receipt and Payment, RECIEPT
on debit side and PAYMENT on credit side.
4. It is prepared for one financial period.
5. It includes both revenue and capital items.
9. INCOME and EXPENDITURE
ACCOUNT
1. It is a nominal account.
2.It’setermines the surplus or deficit of income
over expenditures
3.The concern prepares this account by strictly
following the Double Entry System.
4.The surplus or deficit of this account is
transferred to the capital fund account.
5.Unlike the Receipts and Payments Account, it
does not start with an opening balance and ends
with a closing balance.
