balance sheet,financial accounting,non trading organisation,receipts and payments,income and expenditure

2. A non profit organization, also known as a non-business
entity, not-for-profit organization or non profit institution, is dedicated
to furthering a particular social cause or advocating for a shared point
of view.
In economic terms, it is an organisation that uses its
surplus of the revenues to further achieve its ultimate objective, rather
than distributing its income to the organization's shareholders, leaders,
or members.
Nonprofits are tax exempt or charitable, meaning they do not
pay income tax on the money that they receive for their organization.
They can operate in religious, scientific, research, or educational
settings.

3. Statements prepared by non-trading organization at
the end of the financial year are;
Receipt and Payment Account
Income and Expenditure Account
Balance Sheet

4. It is prepared at the end of the financial year.
It shows the summary of all receipts and
payment of cash transactions under some
important or desired heads.
Since this account gives only the summary of
cash transactions, the details of all the transaction
can be seen in cash book .

5. Receipts
Amount
(Rs.)
Payments
Amount
(Rs.)
Balance b/d Balance b/d (overdraft)
Cash in hand Wages and Salaries
Cash at bank Rent
Subscriptions Rates and Taxes
General Donations Insurance
Sales of newspaper Printing and Stationery
Sale of Sports materials Advertisement
Interest on fixed deposits Sundry expenses
Interest in investments Telephone charges
Locker rent Entertainment expenses
Sales of scraps Audit Fees
Received from charity Honorarium
Miscellaneous receipts Repairs and Renewals
Sale of Investments Purchase of Assets
Sale of Fixed Assets Purchase of Investments
Life Membership Fees Balance c/d
Entrance fees Cash in hand
Balance c/d (overdraft) Cash at bank
xxx xxx
Proforma of Receipts and Payments Account

6. Income and Expenditure account shows the
summary of all incomes and expenditures of an
organization for complete year. It is just like Profit and
Loss Account .

7. Following points should be noted in respect of
Income and Expenditure Account:-
It is a nominal account.
All the expenses are shown in debit side.
All incomes are shown in credit side.
It shows income and expenditure of current year
only on accrual basis.
Only revenue expenses are shown in this account.
No Capital expenditure is shown in this account.

9. Receipt and Payment Account Income and Expenditure Account
It is a real account. It is a nominal account
It is cash account of non-trading
organizations.
It is like profit and loss account
All receipts are shown in debit side
of this account.
All expenses and losses are shown in
debit side of this account.
All payment are shown in credit side
of this account.
All incomes are shown in credit side
of this account
Opening balance of cash is shown in
beginning of this account.
No such balance is shown in
beginning of this account
THE DIFFERENCE BETWEEN RECEIPT AND PAYMENT ACCOUNT
AND INCOME AND EXPENDITURE ACCOUNT

10. Balance at the end represents as
closing balance of cash.
Balance at the end represents
excess of income over the
expenditure or vice versa.
All revenue and capital receipts are
recorded in this account.
It records only revenue receipts.
It shows all receipts and payment
whether they relate to other
financial year.
It show income and expenditures of
current year only.
Depreciation, bad debits etc. are not
recorded in this account.
Depreciation, bad debits are
recorded in this account since these
are the losses to the organization.
As it is a cash account, it will always
show debit balance.
This account may show debit or
credit balance according to loss or
profit.

11. Even a non-profit organisation maintains proper
books of accounts. It aims to facilitate simple and
convenient calculation of items of income and
expenditure and finding the correct position of assets
and liabilities of the organization.

12. Preparation of a balance sheet starts with the
general fund.
Add the respective surplus or deficit in the
amount.
Add life membership fees or legacies at this stage.
Put all fixed assets on the asset side of the
balance sheet.
Showcase the amounts paid in advance and
amount due on the assets and liabilities side.
Post the closing balances of the assets and
liabilities on the respective side of the balance
sheet.
To calculate the amount of the fund, deduct the
value of total liabilities from the value of assets.

13. Proforma of Balance Sheet of Non Trading
Organisation