Accounting for non profit organisation

it will help

1. ACCOUNTING FOR
NON-PROFIT
ORGANISATION

2. MEANING AND CONCEPT
These are the institution/organisation that are
setup with general or specific objective for
rending services and providing social activities
to enhance the welfare of general group and
people
The aim of such institution is not to earn profit
A separate legal entity not owned by
individual or an enterprise

3. Examples of such organisation are school, collages
,public hospitals societies for promoting sports ,arts
and culture
CHARACTERSTICS OR FEATURES
•Formed by Promoters These :
organisation are formed by the promoters
•Separate Existence: These organisation
have separate existence from its members
•Form: It is setup as a charitable

4. society or trust
No profit motive:Its aim is not to earn profit
however the organisation is capable earning profit
Management: it is managed by a group of
individuals known as trustees or managing
committee
Funding: the main source of funding is donations
and government grants
Accounts:These organisation do not
prepare P&L a/c, rather they prepare
income and expenditure a/c

5. The NPOs prepare final a/c every year which comprise
of Recipt&Payment a/c, Income&Expenditue a/c
and balance sheet
FINANCIAL STATEMENTS OF NPOs
It prepares annual or final accounts every year
showing the financial transactions of the
organisation
These annual or final accounts are prepared for its
members and for statutory requirement
Financial Statement of an NPO comprise of the
following
•Receipt and Payment a/c

6. Income and Expenditure a/c
Balance Sheet
INCOME AND EXPENDITURE A/C
It shows all revenue income earned and revenue
expenses incurred during an accounting period. It is
like profit and loss a/c of an business firm
RECEIPT AND PAYMENT A/C
It shows the summary of all cash and bank
transaction occurred during an accounting period

7. BALANCE SHEET
It is a statement than reveals the financial position
of an organisation at a particular date.
It shows assets , liabilities and capital fund it is
prepared after the income and expenditure a/c

8. JAIPUR NATIONAL
UNIVERSITY
SEEDLING SCHOOL OF BUSINESS
AND MANAGEMENT
Naveen Singh
Bcom Honors
1 year (EAFM)