ACCOUNTS OF NON
TRADING ORGANISATION
A.Ayesha Siddiqua
Dept. of B.Com Banking
MEANING OF NON TRADING
ORGANISATION
Non trading organisation are the organisations
Where there is no sale or purchase of goods
Primary objective of these are –to render services
to society
For example clubs, charitable hospitals, trusts,
recreational societies ,religious institutions etc
Professions like doctor, engineer, c.a., consultants
are also included.
FINAL ACCOUNTS OF NON TRADING
ORGANISATION
Receipt and payment account
Income and expenditure account
Balance sheet
RECEIPT AND PAYMENT ACCOUNT
It is prepared from the cash book
It is a summary of cash transactions of a particular period
It is prepared at the end of a year
It is a real account
It records all receipts and payments (capital and revenue
both)
It starts with opening balance of cash and bank
Difference of both sides shows closing balance of cash or
bank.
If cr. Side is greater than dr. then difference is overdraft
RECEIPT AND PAYMENT ACCOUNT AND
CASH BOOK
Cash book
Items are entered date wise.
Prepared by trading organisation.
One item can be written many times.
Receipt and payment
Items are not entered date wise .
Prepared by non trading organisation.
One item can be written one time(heading wise)
INCOME AND EXPENDITURE ACCOUNT
It is prepared by non trading organisation
It is like profit and loss account.
It records only revenue items.
Dr. all expenses and losses ,cr. All incomes and gains.
dr. side – cr. Side = deficit.
Cr. Side – dr. side = surplus
RECEIPT AND PAYMENT ACCOUNT AND
INCOME AND EXPENDITURE ACCOUNT
Summarised statement of cash transactions.
Commence with opening balance of cash and bank.
Dr. side all cash receipts cr. Side all payments.
Includes receipt and payments of any year.
Revenue and capital nature (both)included
Closing balance cash or overdraft
Like profit and loss account.
Opening balance of cash and bank are not shown.
Dr. side all expenditure and losses , cr. Side all incomes and gains.
Only includes current year transactions .
Only revenue items included.
Closing balance deficit or surplus. Receipt and payment account Income and
expenditure account
BALANCE SHEET
It shows the financial position.
Surplus of assets over liabilities is called capital fund.
It is required to create opening balance sheet to know
capital fund if it is not given.
Closing balance sheet is also maintained at the end of
year.
SPECIAL ITEMS OF NON TRADING
CONCERNS
subscriptions
donations
legacy
entrance fees
life membership fees
specific funds
endowment funds
capital fund
PREPARATION OF INCOME AND EXPENDITURE
ACCOUNT FROM RECEIPT AND PAYMENT ACCOUNT
Opening and closing balances of cash and bank
excluded.
Only revenue items are concerned (related to current
year)
Adjustments regarding accrued incomes, outstanding
expenses, depriciation, profit or loss on sale of assets
etc. are to be made.
ADJUSTMENTS= SUBSCRIPTION
Total subscription received during the year
Add=subscription received in advance at the
beginning of year
Add=subscription outstanding at the end of the year.
Less=subscription received in advance at the end of
year
Less= subscription outstanding at the beginning of
the year.
PREPARATION OF RECEIPT AND PAYMENT FROM
INCOME AND EXPENDITURE AND BALANCE SHEET
All cash incomes and payments (capital and revenue)
are to be included of any year received and paid during
current year respectively.
Commence from opening balance of cash and bank.
Non cash items are excluded.
All cash receipt will be shown in dr. side and payments
at cr. Side.
ADJUSTMENTS
Income shown by income and expenditure
Add income o/s at the beginning of year
Add income recived in advance at the end of year
Less income received in adv. at the beginning of year
Less income o/s at the end of year.
