Accounts of 'not for profit' concerns - class-XII

All the revenue incomes during the accounting period are shown on the income side and all of the revenue expenses during the period are shown on the debit side of income expenditure account.

Funds raised by Non-for-Profit organisations through various sources is credited to capital fund. Capital fund is the excess of assets over liabilities.  So, the excess amount which is mostly the income of organisation is the funds raised by them. Any addition in funds will be added ro capital fund/general fund. 

Non-for-profit organisations earn their reputation on the basis of contributions to the welfare. The are set up for the purpose of promoting science, commerce, social cause, education etc. Their main purpose is not to earn profit but to provide services. 

Non-for-Profit organisations do not maintain Capital account. They prepare income and expenditure account as profit and loss account, receipts and payments account as cash account and balance sheet. They do not maintain a capital account because of all the balance regarding the capital introduced and withdrawn are recorded in the balance sheet.

Main source of income of No-for-Profit organisation is legacies, donations and subscriptions. A non-for-Profit organisations is set up for promoting science, commerce, social cause etc. 

The main objective of non-for-profit organisations is providing services. The services provided by the not-for-profit organisations are meant to satisfy the needs of the people like joining as member and receive medicines at very low cost.

The organisations which are set up for providing services are called as not-for-profit organisations. They are set up for purpose other than profit for promoting science, religion, social cause etc. Hence, the organisation meant for a social cause are categorized as Not-for-profit organisation. 

In a double entry system, every transaction has two effects. One is debit and other is credit. In Trial Balance, balances of all the ledger accounts are recorded. If debit side of trial balance matches with credit side it shows the mathematical accuracy of all the accounts. 

The funds raised by not-for-profit-organisation are transferred to the capital fund. This is because like any other profit earning organisation they don't have a capital account to be shown in balance sheet. So, the excess of assets over liabilities is credited to capital fund. 

The not-for-profit organisations are the ones which are responsible for the welfare of society and are a type of places which run without considering the profit. This type of organisation is funded mainly by the donations given by people and in return they are obliged to take care of the welfare of the society.  

A Charitable organisation is an organization whose main objective is social well being. Charitable organisations often depend on donations. Corporation, Audit firms and Insurance companies work for profit motive. They can not be considered as Non- profit organizations. 

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Not for Profit
organisations are formed for providing service to specific group or public at large
such as education, health care, sports and so on. These are organised as
charitable trusts/ societies and subscribers to such organisations are called
members. These organisations have service as the main objective. Normally these
organisations do not undertake any business activity and are managed by
trustees/executive committee. these committee is elected by its members.

Not-for-profit microfinance institutions can be structured as societies, public trusts, or non-profit companies (Section 8 companies).

Funds raised by such Non-for-Profit organisations are credited to capital fund or general fund. The excess of assets over liabilities is treated as capital fund or general fund. 

In Non-profit organizations, the capital funds are accumulated along with capital receipts and receipts that are capitalized by further increasing the surplus or decrease by the deficit during the year. Legacies, Life membership fee and donation are capital receipt because these are of non-recurring nature. Capital receipts accumulate and form capital fund account of Non-profit organisation. 

b'Not for Profit organisations are formed for providing service to specific group or public at large such as education, health care, sports and so on. These are organised as charitable trusts/ societies and subscribers to such organisations are called members. 

Non for profit organisations do not manufacture, purchase or sell goods and may not have credit transactions so they do not have to maintain trading account and profit and loss account. 

Trading concern is an entity that derives its products for sale, thereby revenue, through purchasing products for sale from other producers /manufacturers for resale to their customers base. A sports club is not a trading concern as it does not perform any such tasks. 

As the name suggest not-for-profit entity works to provide social services and doesn't relate any of its activity with profit.

Not-for-Profit organisations refer to the organisations that are used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aim is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase or sell goods and may not have credit transactions. Hence, they need not maintain many books of account (as the trading concerns do) and Trading and Profit and Loss Account. The funds raised by such organisations are credited to capital fund or general fund. The major sources of their income usually are subscriptions from their members, donations, grants-in-aid, income from investments, etc.

b'

Not for Profit
organisations are formed for providing service to specific group or public at large
such as education, health care, sports and so on. These are organised as
charitable trusts/ societies and subscribers to such organisations are called
members. These organisations have service as the main objective. Normally these
organisations do not undertake any business activity and are managed by
trustees/executive committee. They also have to maintain proper accounts and
prepare financial statements. 

Limited by guarantee companies are formed by not for profit organisations, such as sports clubs, charitable organisations etc. A company limited by guarantee does not have any shares or stakeholders but is owned by guarantors who agree to pay a set amount of money towards company debts. In case of NPO, this amount is known as subscription. Each member is responsible towards NPO till the subscription amount only. 

Not-for-Profit organisations refer to the organisations that are used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aim is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase or sell goods and may not have credit transactions. Hence, they need not maintain many books of account (as the trading concerns do) and Trading and Profit and Loss Account.

Not-for-Profit organisations refer to the organisations that are used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aim is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase or sell goods and may not have credit transactions. Hence, they need not maintain many books of account (as the trading concerns do) and Trading and Profit and Loss Account.