NPO Notes5

Study Material & Notes for the Chapter 1

Non-Profit Organization

V. FINANCIAL STATEMENTS
A. For-Profit Organization & Non-Profit Organization
Table 1.5.A
B. Capital & Revenue Receipts
Table 1.5.B
C. Capital & Revenue Payments
Table 1.5.C
D. Receipts and Payments Account
  • Like Cash Account
  • Only Cash transactions are recorded, credit/accrual transactions are not recorded
  • Is a summary of cash and bank transactions prepared at the end of the accounting year
  • Receipts include Capital as well Revenue Receipts, similarly Payments include both Capital & Revenue Payments
  • Receipts & Payment could pertain to any Accounting year…Current, previous, or future
Receipts & Payments Account
Table 1.5.D
E. Income & Expenditure Account
  • Like Profit & Loss Account…summary of Income & Expenditure of an accounting year
  • Transactions are recorded on accrual basis hence both cash & credit transactions are recorded
  • Only transaction of revenue nature is recorded, capital transactions are not recorded
  • Accrual adjustments done (+)/(-) Outstanding at end/beginning (+)/(-) Prepaid at the beginning/end
  • If Income > Expenditure, it is surplus else Deficit (Expenditure > Income)
Receipts & Payments Account
Table 1.5.E
F. Difference between Receipts & Payments Account and Income and Expenditure Account
Table 1.5.F
G. Balance Sheet
  • Balance Sheet shows the Financial position of an NPO at the reporting date/end of accounting year
  • Similar to Balance sheet of For Profit Organizations
  • The Balance sheet shows Capital Fund, Specific fund, Liabilities and Assets
  • Surplus/deficit of the Income & Expenditure Account is shown under Capital fund
  • If Opening Capital Fund is not given, it is computed making Opening Balance Sheet
Balance Sheet
Table 1.5.G
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