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1. JAIPUR NATIONAL UNIVERSITY
A Presentation of ACCOUNTS
ON THE TOPIC ACCOUNTS OF NON-PROFIT
ORGANISATIONS
SUBMITTED TO:
MR.Mohit Mehta
2. MEANING
People Join together for a number of reasons in voluntary
organization: for mutual entertainment, for protection, or for
professional reasons. There are sports clubs, trade unions,
consumer societies, political associations, and many more. The
degree of richness of any society lies partly in the variety of
the voluntary organization it promotes.
Non-profit making organization are those, which do not
buy/manufacture and sell goods and whose primary object is
not to earn profit. Their object is to do good to the society
through welfare activities. Examples of non-profit
organizations are clubs, schools, colleges, Hospitals, Libraries
etc. These organizations are also called non-trading concerns.
3. Receipt and Payment Account:
"A receipt and payment account is a summarized cash book (cash and bank)
for a given period".
Characteristics of Receipt and Payment Account:
It is abridged addition of cash book - it is, in effect, a summary of cash book.
Cash receipts and cash payments of both capital and revenue nature are
recorded here.
Advantages:
Total receipts and total payments under various heads are available at a
glance.
The amount of cash in hand at the year end can be ascertained.
4. Difference between Cash Book and Receipt
and Payment Account:
Cash Book
Receipts and
Payments Account
1 It is a book of
account within
the double entry
system.
1 It is an account
outside the double
entry system.
2 Each entry is followed
by narration
2 No narration is
written here.
3 Ledger reference is
recorded here
3 No ledger reference
is recorded
4 Daily cash balance
can be ascertained
from this book.
4 Daily cash balance
cannot be
ascertained.
5. Income and Expenditure Account:
The account through which surplus or deficit of a non-profit-seeking
concern is ascertained, is called Income and Expenditure Account.
All the information necessary for preparation of this account will be available
from ledger accounts. Its left-hand (i.e. Debit) side records all revenue
expenditure, while the right-hand (i.e. Credit) side records all revenues
relating to the current year. The balance of the account, if credit, indicates
surplus, i.e. excess of income over expenditure. Conversely, the balance of
the account, if debit, indicates deficit, i.e. excess of expenditure over
income
6. Some Peculiar Items of Non-profit Seeking
Concerns:
1. Depreciation:
2. Sale of Assets:
3. Purchase and Sale of Newspaper:
4. Subscription:
5. Special Subscription:
Admission Fee:
Legacy:
Life Membership Fee:
Donation:
Capital Fund:
7. Difference between Receipt and Payment
Account and Income and Expenditure
Account:
Receipt and Payment Income and Expenditure
It is a summarized statement of all cash
transactions during an accounting year.
It is the account of revenue income and
revenue expenditure of an accounting
year.
Only cash transactions are recorded
here.
It is not confined to, cash transactions
only, i.e. non-cash transactions are also
included in it.
This account shows opening balance
except in the first year. It has no opening balance.
It is outside the Double Entry system. It is within the Double Entry system.
