NPO Notes2

Study Material & Notes for the Chapter 1

Non-Profit Organization

II. FUND BASED ACCOUNTING

  • NPO receives donations for specific purposes and accordingly create a specific fund for the said purpose
  • Two categories of fund – General Fund and Specific Fund
  • In the Fund based accounting, receipt of donations and incomes relating to a particular fund are credited to that fund and payments and expenses are debited to it
A. Funds – Inflow/Outflows
Table 1.2.A
B. General Fund - Capital fund
Table 1.2.B
C. Specific Fund – Building Fund
Table 1.2.C
D. Intra Fund Adjustments

From building Fund to Capital Fund: Building Under Construction

Transfer from Building to Capital Fund (+) Capital Fund (-) Building Fund

E. Funds Fund expenses over Fund Balance (Specific Fund-Tournament Fund)

If after adding incomes to fund, further donations received and deducting expenses, the fund shows debit balance, it is transferred i.e., shown on the Debit side of Income and Expenditure A/c

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