A non-profit organization is one whose primary objective is to provide services to society through welfare activities rather than earning a profit. It records its financial transactions through a receipts and payments account which summarizes cash inflows and outflows for a given period. An income and expenditure account is also prepared to determine any surplus or deficit. Some sources of funds for non-profits include regular subscriptions from members, special subscriptions for specific purposes, admission fees from new members, legacies from wills, life membership fees, donations from members and the public, and capital funds consisting of total assets minus liabilities.

1. NON-PROFIT MAKING ORGANIZATION
EXPLAIN NON-PROFIT MAKING ORGANIZATION / NON-TRADING
ORGANIZATION.
Non profit making organization are those which do not buy and sell goods and whose primary
object is not to earn profit, Their object is to do goods to the society through welfare activities.
EXPLAIN RECEIPTS AND PAYMENT ACCOUNT.
Receipts and payments account is a summarized cash book for a given period.
EXPLAIN INCOME AND EXPENDITURES ACCOUNT.
The account through which surplus or deficit of a non-profit making organization is ascertained.
DEFINE SUBSCRIPTION.
The amount received from the member of the organization regularly (as per rules) is called
subscription.
DEFINE SPECIAL SUBSCRIPTION.
The additional subscription collected from members over and above the regular subscription for
some special purpose is called special subscription.
DEFINE ADMISSION FEE.
The amount which is paid by a new member at the time of admission is called admission fee.
DEFINE LEGACY.
Legacy refers to property received by virtue of a will of a person after his death.
DEFINE LIFE MEMBERSHIP FEE.
The amount which is paid by a member’s lump sum to become a life member of organization is
called life membership fee.
DEFINE DONATION.
Amount received from members and general public by way of gift is known as donation.
DEFINE CAPITAL FUND.
Excess of total assets over external liabilities of a non-profit making organization is called capital
fund.
Capital Fund = Asset - Liabilities
PUNJAB COLLEGE OF COMMERCE PROF. HAFIZ MUHAMMAD NAWAZ PAGE 1