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    Non Trading Organization

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    PBGYB
    Non-trading organizations are associations, clubs, or societies formed to promote interests of members rather than make a profit. While they do not sell goods or services, they earn income from member fees, donations, or sponsorships to finance activities. As income comes from members, proper financial records and statements must be prepared and presented annually. The final accounts for non-trading organizations is an income and expenditure statement, equivalent to a profit and loss statement for businesses, that determines any surplus or deficit of income over expenditures for the period. Subscription fees from members are a main source of income, so adjustments must be made in the subscription account for amounts pertaining to other periods.

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    Attribution Non-Commercial (BY-NC)
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    Non Trading Organization

    Uploaded by

    PBGYB
    8K views2 pages
    Non-trading organizations are associations, clubs, or societies formed to promote interests of members rather than make a profit. While they do not sell goods or services, they earn income from member fees, donations, or sponsorships to finance activities. As income comes from members, proper financial records and statements must be prepared and presented annually. The final accounts for non-trading organizations is an income and expenditure statement, equivalent to a profit and loss statement for businesses, that determines any surplus or deficit of income over expenditures for the period. Subscription fees from members are a main source of income, so adjustments must be made in the subscription account for amounts pertaining to other periods.

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    Non-trading organizations are associations, clubs, or societies formed to promote interests of members rather than make a profit. While they do not sell goods or services, they earn income from member fees, donations, or sponsorships to finance activities. As income comes from members, proper financial records and statements must be prepared and presented annually. The final accounts for non-trading organizations is an income and expenditure statement, equivalent to a profit and loss statement for businesses, that determines any surplus or deficit of income over expenditures for the period. Subscription fees from members are a main source of income, so adjustments must be made in the subscription account for amounts pertaining to other periods.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    8K views2 pages

    Non Trading Organization

    Uploaded by

    PBGYB
    Non-trading organizations are associations, clubs, or societies formed to promote interests of members rather than make a profit. While they do not sell goods or services, they earn income from member fees, donations, or sponsorships to finance activities. As income comes from members, proper financial records and statements must be prepared and presented annually. The final accounts for non-trading organizations is an income and expenditure statement, equivalent to a profit and loss statement for businesses, that determines any surplus or deficit of income over expenditures for the period. Subscription fees from members are a main source of income, so adjustments must be made in the subscription account for amounts pertaining to other periods.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Non-Trading Organizations

    A business concern is an organization involved in activities of buying or selling goods and services with a view of making a profit. There are associations, clubs or societies which are not formed for the purpose of making profit. These are called non-trading organizations. They are formed to cater and promote the sporting, cultural and recreational interest of its members. Although these organizations do not sell goods or services they do earn income and incur expenses. Their income is derived mainly from its members subscription fees, donations or sponsorships. These incomes are used to finance the daily activities or programs carried out by the organization. Since the income comes mainly from members, proper accounts need to be kept and financial statements need to be prepared and presented to its members at the end of each financial year.

    Receipts and Payment A/C


    This account is a summary of all receipt and payment items that appear in the cashbook. In fact, it is a cashbook given a different name. Its main features are: a. The balance at the beginning and at the end of the accounting period represents the amount of the cash in hand and cash at bank at the start and end of the period. b. All receipts, regardless of revenue or capital receipts are recorded on the debit side. c. All payments regardless of revenue or capital expenditure are recorded on the credit side. Receipts and Payment A/C

    Final Accounts
    The final account for a non-trading organization is the income and expenditure account. The income and expenditure account of a non-trading organization is equivalent to the profit and loss account of a business organization. The purpose of the income and expenditure account is to determine whether there is a surplus or deficit of the income over expenditure. The principles involved in the preparation of such account are very similar however its distinguished feature as follows: 1. Only revenue expenditures are recorded on the debit side 2. Only revenue incomes are recorded on the credit side 3. Only items relating to revenue expenditure and revenue income which ought to have incurred and earn for the particular current period are recorded here. 4. Revenue expenditure and revenue receipts relating previous periods and subsiding periods cannot be recorded here 5. All capital items i.e. capital expenditure and capital receipts cannot be recorded here

    6. If the total revenue receipt i.e. the credit total exceeds the total of the revenue expenditure i.e. the debit total, it indicates a surplus of income over expenditure (net profit) excess of income over expenditure 7. Where the total debit i.e. revenue expenditure exceeds the total credit balance i.e. revenue receipt it indicates a deficit known as an excess of expenditure over income (net loss)

    Subscription (Fees Paid)


    The collection of subscription from members remains the chief source of income of any club or society. If members do not pay their subscriptions promptly the club will face problems in running or carrying its activities. Subscription owed by members is termed subscription due or subscription in arrears. Subscription paid by members in the current financial year for the next financial year is termed subscription in advance. When an arrears or advance payment happens adjustments in the preparation of the subscription account are to be made so that only the amount of revenue earned during the current year is included in the current years income and expenditure account.

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