This is an extract of our Final Accounts For Clubs And Societies document, which we sell as part of our Principles of Accounting Notes collection written by the top tier of Acca students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Principles of Accounting Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
ACCOUNTING FOR NOT-FOR-PROFIT ORGANIZATIONS RECEIPTS AND PAYMENTS ACCOUNTS AND INCOME AND EXPENDITURE ACCOUNTS
For example charities, clubs, associations and other non-profit oriented organizations, that do not prepare trading and profit and loss accounts. Instead they prepare receipts and payments accounts or income and expenditure accounts.
Receipts and Payments Accounts
This a summary of the cash book for the period for an organization with no assets other than cash and no liabilities hence the cash book reveals everything about what happened financially during the period.
Income and expenditure account
Used when the organization owns other assets apart from cash and it also has liabilities. The income and expenditure account is prepared in the same way and the trading profit and loss account; the only difference is the terms used.
Profit oriented organizations
Non-profit oriented organizations
1) Trading profit and loss account 2) Net profit 3) Net loss
Income and expenditure account Surplus of income over expenditure Deficit of income over expenditure
Profit or loss for a special purpose
Profit from trading organizations for any trading activity carried out in a non-trading organization, a trading account is prepares to determine the profit or loss from such services for example sale of food -as an activity by club members; profits from social events; interest receipts from dividends Any profit from the trading activities is transferred to the income and expenditure account.
Principle of Accounts By Sir Qubair Salim Chartered Certified Accountant.
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