Chapter - 04 Financial Statement For Non Profit Making Organization

Chapter- 4
Financial Statements of Not-for-Profit Organization
Learning Objectives
After going through this chapter, students will be able to:
 Describe the meaning of a non-profit making organization

 Make a distinction between profit making and non-profit making organization
 Understand the concepts of Receipts and Payments Account
 Understand the meaning of Income and Expenditure Account and its features
 Learn the process of preparing Income & Expenditure Account and Balance Sheet from
Receipts and Payments Account
Introduction
We are living in a society where people are inter-dependent on each other for meeting various
requirements in their day to day life. Especially, the business firms help the general people to
get their desired products easily at their door step. The primary objective of such business
concerns are to make profits and provide quality services. But there are some organizations
operate with the intentions to serve the people and work towards their development and
wellbeing. These firms do not possess any profit earning motive. The main objectives of these
concerns are to render quality services to its members and the people in general. Such
organizations are treated as Not-for-profit Organization. Such enterprises may work in various
fields such as education, health, religious areas, charity, social etc. It is evident from the
activities of clubs, co-operative societies, hospitals, educational institutions.
Each business organization requires funds to operate its activities smoothly and effectively. So,
it is also applicable in case of such not-for-profit making concerns. The major sources of funds
for such concerns are donations and grants received from the government. Due to the limited
resources, they largely depend on the support of donator and government for such financial
support or assistance from time to time. They have provided their report of income and
expenditures in a proper form to government for getting more grants. Such organizations
followed the accrual basis of accounting to maintain their records.
Meaning and definitions
Not-for-Profit organization refers to those organization started with the purpose of providing
service to its members and the general people. These organizations do not have any intention to
create profit. These are established and operated in diversified areas of the society such as
education, health, charity etc. Educational Institutions like college, schools, Clubs, Charitable
Organizations like Orphanage, Old Age Home etc. Basically these organisations are formed for
promotion of commerce, science, art and religion. They have maintained their accounting
records by following accrual basis of accounting. These concerns impose restriction on payment
of dividend to its members and spend their income in promoting the well-defined objective of the
institution. They are not engaged in performing various trading activities. If trading activities are
undertaken, then the profit of the organization will be utilized for attaining the organizational
objectives. There is different type of non-profit making organizations operated in the society. For
example,
 Sports club & social club.
 Churches and gurudwaras.
 Temples and masjids.
 Libraries & charitable hospitals
 Professional bodies (The institute of chartered accountants of India, The Institute of Cost
and Works Accountants of India etc.)
Characteristics / Features of Non-profit Concerns

The basic feature or characteristics of a non-profit organization are as follows:
Service Motive
The primary motive of a non-profit organization is to render services to its members and the
general people in the society. These concerns are established to work towards the welfare of the
society.
Absence of Profit Motive
Profit earning is considered as the basic criteria for any business firm. But this is absent in case
of non-profit concerns where the main intention to provide service and not to earn and maximize
profit.
Distribution of Surplus
The concept of profit does not exist in non-profit making concerns. It is the surplus which may
generate during the course of business if the income exceeds the expenditures. The amount of
surplus if generated is not distributed among the members of the concern as like other business.
Such amount will enhance the capital fund of the concern as an addition in the balance sheet.
Separate Legal Entity
The concept of separate legal entity is also applicable for the non-profit making institutions.
These organizations possess the status of separate legal entity as like other form of business.
Management
These concerns are regulated and managed by elected representatives of members.
Sources of Funds
The major sources of funds of a non-profit making organization are donations and grants
received from the governments. Basically, they do not have sufficient funds to operate their
activities. So, it becomes essential for them to get dependent on subscriptions received from
members, donations, government grants etc.
Accounting Records
Non-profit concerns follow the accrual basis of accounting for maintenance of their accounting
records. It prepares receipt and payment account, income and expenditure account and balance
sheet to show its transactions occurred during the course of business.
Objective of Non-profit making organization
The main objectives of a non-profit making concern are as follows:
1. To provide quality services to its members as well as the society.

2. To evaluate the performance of the concern during sixed time interval to assess strength
and weakness of the concern
3. To put efforts towards attainment of the organizational objectives
4. To check the application of funds collected from several sources whether perfectly
operated or not
5. To work as per the rules, regulations and policies formed by the concern
6. To maintain accurate and appropriate records of all the transactions undertaken during the
financial year
7. To collect funds from various sources like donation, government grants etc.
8. To submit updated annual accounting records to the government.
Difference between Profit making Concern and Non-profit making concern
Points Profit Making Concerns Non-profit making Concerns

Objective The primary objective of such The main motive of a non-profit
business firms is to earn profit and concern is to provide services to its
maximize its volume. members and the general public.
Ownership The ownership lies with the owner or The concept of ownership is missing.
Structure proprietor of the business. Member of such concerns are regarded
as the owner.
Output The excess of income over The excess of income over expenditure
expenditure is termed as profit. is termed as surplus.
Distribution of Profit or loss is distributed among the Surplus or deficit is not distributed
Profit/Surplus owners. among members. It is adjusted to capital
fund.
Financial Financial Statements of such profit Financial Statement of a non-profit
Statements making concerns contain Trading making concern contains Receipts &
Account, Profit & Loss Account and Payments Account, Income &
Position Statement otherwise termed Expenditure Account and Balance
as Balance Sheet. Sheet.
Books of accounts
A non-profit organization represents a type of organisation established with the objective of

rendering services to its members and the society as a whole and not to earn profit. In these
concerns, most of the transactions are performed on cash basis. It requires maintaining a cash
book to record all the receipts and payments made in cash. It is recorded by a specific account
termed as Receipts and Payment Account. The receipt and payment account is generally
prepared at the end of the accounting period. The left hand side of this account shows various
receipts and the right hand side reflects various payments made by the organisation.
Besides, cash book or receipts and payment account these organisations maintain following
books:
· Members Register
· Minutes Book
· Stock Register
(1) Members Register:
Members register represents a special type of register maintained to record the details of all
members or all subscribers of the organisation. This register records name and addresses of its
members and their date of admission to the organisation.
(2) Minutes Book:
Minutes book maintains a detail record of several proceedings in the general body meeting. This
register also records various decisions taken by different committees or management.
(3) Stock Register:
Stock register is a type of register prepared to record details of available fixed assets in the
concern. This register provides details knowledge about acquisition of assets, their use and
present balance of those assets. Stock register can be maintained for the purpose of recording
information about several consumable items to ascertain consumables purchased, consumed and
their current balance.
Financial Statements of Not-for-profit Organizations
Financial Statement is required for all types of business whether profit making or non-profit
making organization. All the business enterprises need to show their financial position to their
stake holders and the users of accounting information in the society. When it comes to Non-
profit making concerns, it becomes highly essential to show its financial position as it is a service
providing concern and not established to earn profit. Most of the transactions of the non-profit
organizations are made on cash basis. It creates the urge to maintain a detail of all these cash
receipts and payments made during the accounting year. It is not required to maintain various
books of accounts as like trading and profit making concerns. Hence, they do maintain a cash
book and minimum number of such other books required for meeting the requirements of the
organisation. Non- profit organizations maintain proper books of accounts in order to supply to
the members, donors and the government various required information related to cash, bank
balances, and summary of the expenses, incomes and the financial position.
For preparing financial Statement, such concerns prepare the following accounts and statements:
1. Receipts and Payments Account;

2. Income and Expenditure Account; and
3. Balance Sheet.
Receipts and Payments Account is prepared in lieu of cash book. It is a real account. It records
all the cash transactions taken place during the accounting period of a non-profit making
organization. This account records all the individual cash transactions date-wise both receipts
and payments. Receipts and Payments Account shows totals of cash and bank transactions under
different appropriate heads. It is basically prepared at the end of the accounting year. It is
otherwise termed as a summarized cash book. Receipts and Payments Account starts with
opening balance of cash and bank, and ends with closing balance of cash and bank. All receipts
are recorded on the debit side and all payments are recorded on the credit side of this account.
The primary objective of preparing this account is to ascertain the closing balance of cash and
bank and to show different receipts and payments irrespective of capital or revenue nature under
different suitable heads for a specified period namely an accounting year. It does not record any
non cash expenses or incomes.
Features of Receipts and Payments Account

The main features or characteristics of receipts and payments accounts are as follows:
a. It is considered as a summarized cash book. It records all the cash and bank transactions.
All receipts are shown on the debit side and all payments are shown on the credit side.
b. This account commences with opening balance of cash and ends with closing balance of
cash and bank. The entire cash and bank transactions are shown in a single column. All
the receipts made both in cash or through banks are recorded on the debit side of the
account and payments in cash as well as by cheques are entered on the credit side. The
concepts of recording contra entries made in the cash book are completely eliminated in
this account.
c. It cannot be regarded as a part of double entry system of book keeping. It is prepared in
lieu of cash book identical to that of a cash book.
d. This account maintains a detail record of both revenue and capital receipts and payments.
All the receipts irrespective of its nature are recorded in the debit side column and all the
payments whether capital or revenues are reflected in the credit column.
e. Receipt and Payment Account starts with a debit balance representing cash in hand and
balances at bank. However, in case of bank overdraft, where bank account shows
negative balance, this account may represent a credit balance.
f. It records exclusively the actual amount received and paid during the year. Expenses
outstanding and incomes due but not received are not recorded in it.
g. This account records the cash received and cash paid during the current year whether
related to previous year, current year or next year.
Specimen of a Receipts and Payments Account
SPECIMEN RECEIPTS & PAYMENT ACCONT

RECEIPTS AND PAYMENTS ACCOUNT
Dr. for the year ended ….. Cr.
Receipts Amount Payments Amount
Rs. Rs.
To Balance b/d : Revenue Payments:
Cast in Hand By Salaries
Cash in Bank By Printing and Stationery
By Postage and Telegrams
Revenue Receipts: By Repairs and Maintenance
To Subscriptions: By Rent, Rate and Taxes
Arrear By Telephone and Internet
Current Charges
Future By Insurance
To General Donations By Ground Rent
To Govt. Grant for Maintenance By Honorarium to Secretary
To sale of Old Newspapers By Travelling Expenses
To Proceeds of Lectures By Advertisement
To sales of Grass By Audit Fee
To Proceeds from Charity Show By Bar Purchases
To Rent Received By Newspapers, Magazines,
TO Interest from Bank etc.
To Interest or Dividend on By Interest on Borrowings
General Fund Investments By Gardening Expenses
TO Green Fees Received By Meeting Expenses
To Receipts from Dispensary By Scholarship Awarded
To Locker’s Rent Received By Charities
TO Advertisements in the Year By Picnic Expenses
Books By Billiard Room
To Miscellaneous Receipts Expenses
Capital Receipts : Capital Payments:
To Legacies By Library Books

To Entrance Fee By Purchase of Land and
To Live Membership Fee Building
To Subscriptions for Specific By Extension of Building
Purposes By Electric
To Endowment Fund Receipts Installations
To Specific Fund Receipts By Investments
-Prize Fund By Furniture
-Sports Fund By Bank Loan
-Scholarship Fund By Billiard Table
To Interest on Specific Fund By Motor Vehicles
Investments By Mowing Machine
To Sale of Fixed Assets: By Sports Equipments
Sorts Equipment By Surgical Equipments
Furniture By Purchase of Crockery
Investments By Balance c/d
To Bank Loan Cash in Hand
Cash at Bank
……. …….
Distinction between Cash Book and Receipts and Payments Account
Points Cash Book Receipts & Payments Account

Nature Cash book is prepared by all the It is a real account prepared to record
trading concerns for recording all the all the receipts and payments made in
cash and bank transactions undertaken non-profit making concerns. This
during the course of business. account is prepared in lieu of cash
book.
Period Cash book records all the cash and This account is prepared at the end of
bank transactions on daily basis. the accounting year.
Process of All the cash transactions are recorded Transactions are not recorded date
Recording date wise. wise.
Users Cash book is prepared and used by all Receipts and Payments Account is
the trading concerns. basically prepared and used by non-
profit making organizations.
Recording of Cash and bank receipts are recorded All the receipts are recorded in the
transactions in the debit side of cash book in the debit side of this account in a single
cash column and bank column column and all the payments are
respectively. All the payments made recorded in the credit side.
in cash or through bank are recorded
in the credit side separately in cash
and bank columns.
Accounting In this ledger account, Ledger Folio is Cash book is a journalized ledger. It
Format absent. contains Ledger Folio in it.
Double Entry It is regarded as an integral part of It is not a part of the double entry
System double entry system as a subsidiary book keeping system though form part
book and book of original entry. of the financial statements.
Steps to Prepare Receipt and Payment Account
At the time of preparing Receipts and Payments Account, the following steps are to be followed:
STEP- 1 The opening balance of cash in hand and cash at bank are to be extracted from the
cash book and posted shown on debit side. This amount of opening cash and bank
balance are recorded under the head ‘To Balance b/d”. In case of negative balance in
the bank balance refers to a overdraft situation, such negative balance will be shown
in the credit side under the head “By Balance b/d”.
STEP-2: All the receipts and payments irrespective of capital or revenue nature are recorded
in the debit side and credit side respectively. These receipts may contain receipts of
current year, arrears and advances.
STEP-3: Both the side of the Receipts and Payments Account are to be computed and
followed the ledger balancing procedure. The side shows deficit will carry the
closing balance.
STEP-4: Once balancing work is performed, the next step is to tally both the side of the
account. Both debit and credit side of the Receipts and Payments account must
become equal after recording all the transactions and balancing the accounts.
Let us take some examples of preparing Receipts and Payments Account from various
informations available in cash book.
ILLUSTRATION - 1 (Preparation of Receipt and Payment Account from cash book)
Cash Bank Cash Bank

Date Particulars Date Particulars
Rs. Rs. Rs. Rs.
2016 2016
Jan 1 To Balance b / d 8,000 30,000 Jan 7 By Bank 5,000
4 To Subscription 6,000 31 By Balance c/d 9,000 35,000
7 To Cash
5,000
(deposit into bank)
14,000 35,000 14,000 35,000
Feb. 1 To Balance b/d 9,000 35,000 14 By Printing & 2,000

Stationery
15,000 35,000 15,000 35,000
Mar. 1 To Balance b/d 13,000 35,000 Mar. 31 By Balance c/d 13,000 35,000
13,000 35,000 13,000 35,000
Apr. 1 To Balance b/d 13,000 35,000 Apr. 15 By Cash 8,000
11 To Subscription 4,000 22 By Furniture 11,000
15 To Bank (Cash 30 By Balance c/d 27,000
withdrawn from 8,000 14,000
Bank)
25,000 35,000 25,000 35,000
May 1 To Balance b/d 14,000 27,000 May 31 By Balance c/d 14,000 27,000
14,000 27,000 14,000 27,000
Jun 1 To Balance b/d 14,000 27,000 Jun 30 By Balance c/d 14,000 27,000
14,000 27,000 14,000 27,000
July 1 To Balance b/d 14,000 27,000 July 27 By Postage 3,000
15 31 By Balance c/d
To Subscription 5,000 16,000 27,000
19,000 27,000 19,000 27,000
Aug. 1 To Balance b/d 16,000 27,000 Aug. 31 By Balance c/d 16,000 27,000
16,000 27,000 16,000 27,000
Sep. 1 To Balance b/d 16,000 27,000 Sep. 30 By Balance c/d 16,000 27,000
Oct. 1 To Balance b/d 16,000 27,000 Oct. 31 By Balance c/d 16,000 27,000
16,000 27,000 16,000 27,000
Nov 1 To Balance b/d 16,000 27,000 Nov 16 By Bank 2,000
16 To Cash (Deposited
2,000
into Bank)
20,000 29,000 20,000 29,000
Dec. 1 To Balance b/d 18,000 29,000 Dec 16 By Rent 3,000
18 By Salaries 2,000
22 By Honorarium 4,000
31 By Balance c/d 15,000 23,000
18,000 29,000 18,000 29,000
SOLUTION
It is very crucial to prepare a special account containing the summary of all the transactions
before preparation of Receipts and Payment Account. At the time of preparing this account, all
the contra transactions or contra entries i.e. (cash deposited into bank and cash withdrawn from
bank) are to be ignored. A Summary of transactions is given below;
SUMMARY OF TRANSACTIONS
Receipts Rs. Payments Rs.

Subscription Printing & Stationery 2,000
[6000+6000+4000+5000+4000] 25,000 Furniture 11,000
Postage 3,000
Salaries 2,000
Rent 3,000
Honorarium 4,000
RECEIPT AND PAYMENT ACCOUNT
Dr. FOR THE YEAR ENDED 31ST. DECEMBER 2016 Cr.

To Balance b/d Printing & Stationery 2,000
Cash 8,000 Furniture 11,000
Bank 30,000 38,000 Postage 3,000
To Subscription 25,000 Salaries 2,000
Rent 3,000
Honorarium 4,000
By Balance c/d
Cash 15,000
Bank 23,000 38,000
63,000 63,000
IILLUSTRATION - 2 (Preparation of Receipts and Payment Account)
From the cash book of Narayani Club, Phulbani, prepare a Receipts and Payment Account for
the year ending 31st March 2016.
Rs. Rs.
Cash in hand (01.04.2015) 5,000 Entrance fee 4,000
Subscription received 10,000 Life Membership fees 6,000
[Including Rs.2,000 for 2014-15 and Books and Newspapers 2,500
Rs.3.000 for 2016-17]
Cash deposited into Bank 6,000 Donation received 5,000
Printing and Stationary 5,000 Purchase of Sports Equipment 2,000
Interest received 2,000 Furniture Purchased 10,000
Withdrawn from bank 3,000
Expenses on Tournament 2,000
Sale of old Furniture (Book 1,500
value 2,000)
SOLUTION
RECEIPTS AND PAYMENT ACCOUNT OF NARAYANI CLUB

Dr. For the year ending 31st March 2016 Cr.
Rs. Rs.
To Balance b/d 3,000
Cash 5000 5,000
By printing and stationary 800 5,000
To Subscription By Books &Newspaper 1,500 2,500

2014-15 2,000
2015-16 5,000 10,000
2016-17 3,000
To Donation received 5,000 By Purchase of sports equipments12 2,000

To Interest received 2,000 By Furniture 8,000 10,000
To Entrance fee 4,000 By Expenses on Tournament 1,200 2,000
To sale of old furniture 1,500
Book Value 2,000)
To Life Membership Fee 6,000
By Balance c/d 4,300 12,000
(Balancing figure)
33,500 33,500
WORKING NOTES
1. At the time of preparing receipt and payment account from the available cash book,
transactions like cash deposited into bank of Rs.6,000 and cash withdrawn from bank
of Rs.3,000 are not to be recorded as because contra entries.
2. Due to absence of information about opening bank balance, it may not be possible to
ascertain the value of closing bank balance. So, the balancing figure of Rs 12,000 is
shown as the closing balance of cash.
3. The amount of subscription can be shown in the Receipts & Payments Account as
“Subscription received Rs. 10,000’’ without providing the year wise break up.
Income & Expenditure Account
In a non-profit making concern, an account is prepared to record all the expenditures and
incomes of occurred during the accounting year. This account is termed as Income &
Expenditure Account. It is a nominal account. This account records all the expenses and incomes
of revenue nature related to the current accounting period. This account maintains its records on
accrual basis of accounting. Income and Expenditure Account is prepared in the light of Profit
and Loss Account. In this account, all the revenue expenses are recorded in the left hand side
termed as Expenditures and all the revenue incomes are posted in the right hand side known as
Income. If the income exceeds the expenditures, it is termed as surplus and if the expenditure
will become more than the incomes, it will be regarded as deficit or deficiency. Generally,
Income & Expenditure Account is prepared from the information extracted from the Receipts &
Payments Account along with other necessary adjustments.
Features of Income & Expenditure Account
The main features of an Income and Expenditure Account is described below:
1. It is a nominal account prepared to record all the revenue expenditures and incomes
occurred during the accounting year of a non-profit making concern.
2. It follows the principle of accrual or mercantile basis of accounting for maintaining its
accounting records.
3. It records all the expenditures and incomes relating to the current year. It does not include
any arrears or advance receipts or payments.
4. It records all revenue losses and expenses on debit side and all revenue incomes and
gains on credit side.
5. Revenue items are recorded in this account and it ignores all the transactions of capital
nature.
6. This account does not have any opening balance in it. However, the closing balance may
take the shape of either surplus or deficit.
7. It also records several non-cash expenditures such as depreciation, bad debts, expenses
payable and incomes receivable for the current accounting period.
SPECIMEN INCOME AND EXPENDITURE ACCOUNT

INCOME AND EXPENDITURE ACCOUNT
for the year ended……….
Dr. Cr.
Expenditure Amount Income Amount
Rs. Rs.
By Subscription of Received
To Salaries of Wages
By Entrance Fees Received
To Rent, Rated and Taxes
By Donation Received
To Repair, Renewals and Replacements
By Rent Received
To Charities
By Dividend Received
To Printing and Stationery
By Interest on Investments
To Postage and Telegrams
By Proceeds of Concerts
To Telephone Charges
By Telephone Receipts
To Insurance
By Receipts from Cultural or
To Ground Rent
By Charity Shows
To Municipal Taxes
By Billiard Room Receipts
To Ground Upkeep
By Receipts from Games
To Land Revenue
By Competition Receipts
To Honorarium to Secretary
By Green Fees
To Establishment Charges
By Receipts from Swimming Pool
To Management Expenses
By Receipts from Dispensary
To Office Expenses
By Hire Charges of Hass (s)
To Wages of Grounds men
By Sale of Tickets for Annual
To Cleaning and Washing Charges
Dinner
By Examination Fees
To Travelling Expenses
By Tuition Fees
To Purchase for Bar
By Fees from Patients
To Purchase for Dining Room
By Interest on Bank Deposits
To Purchase for Sports Material
By Cocker’s Rent Received
To Gardening Expenses
By Govt. Grants for maintenance
To Meeting Expenses
By Grants from maintenance
To Newspaper, Magazines, Journals
and Periodicals
By Advertisement in the Year-
To Cost of Refreshment
Book
By Sale of old Newspapers,
To Cost of Entertainment
magazines etc.
By Certificate Fees
To Cost of Annual Dinner
By Takings (Collections):
To Cost of arranging Lectures
-Bar
To Cost of arranging Concerts
-Restaurant
To Cost of Cultural Shows
-Dining Room
To Annual Function Expenses
-Club Day
To Car Expenses
By Sale of Drama Tickets
To Audit Fees
By Miscellaneous Receipts
To Surgery and Dispensary
By Picnic Receipts
To Examination Fees
By Fees from Non-Members
To General Expenses
By Grazing Rent
To Miscellaneous Expenses
By Sale of Journals
To Pretty Expenses
By Sale of Grass
To Election Expenses
By Tennis Fees Received
To Cost of arranging Competitions
By Profit on Sale of Fixed Assets
To Billiard Room Expenses
By Visiting Fees (visit to patients)
To Bank Charges
By Hire of Ground
To Interest on Borrowings
To Loss on Sale of Fixed Assets
To Umpire Fees
To Picnic Expenses
To Games Expenses
To Bat Balls etc.
To Wickets and Matting
To Depreciation on :
-Building
-Furniture
-Sports Equipments
-Library Books
-Vehicles
-Office Equipments
To Help to Poor Students
To Tournament Expenses
To Prizes awarded
To Drama Expenses
To Honorarium to Cricket Coach
To Honorarium to Doctors
To Affiliation Fees to Main Club
To Water Charges
Gardening Expenses
To Surplus (Excess of Income over
Expenditure)
Distinction between ‘Receipts & Payments Account and Income & Expenditure Account
The Receipts and Payments Account is regarded as a summarized cash book maintained by non-
profit making organizations. On the other side, the Income and Expenditure Account is an
account records all the revenue expenses and incomes occurred during the course of business
namely an accounting year. This account is prepared from the informations extracted from the
Receipts & Payments Account. These two accounts are different from each other in following
respects:
DISTINCTION BETWEEN RECEIPTS & PAYMENTS ACCOUNT AND INCOME &
EXPENDITURE ACCOUNT
Basis of Difference Income & Expenditure

Receipts & Payments Account
Account
1. Types of Account It is a nominal account.
It is a real account
Homogeneity It is prepared in lieu of Cash It is similar to Profit and
2.
Book Loss Account of a profit
making concern.
3. Format All the receipts are recorded in All the expenditures are
the debit side and the payments recorded in the debit side
are in the credit side made
and all the incomes in the
during the accounting period. credit side.
4. Types of transactions It records transactions related to It records only revenue
included both capital and revenue nature. items such as revenue
expenditures and incomes.
5. Ignored items It ignores contra entries like cash It ignores the transactions of
deposited in bank and capital nature.
withdrawal from bank.
Period It records all the cash and bank It records only the expenses
6.
transactions made during the or incomes relating to
current year relating to past, current accounting period
present or future periods. only.
Cash Items It ignores non-cash items like * It records non-cash items
7.
credit purchase, credit sale, also like credit purchase"
depreciation, bad debts, etc. credit sale" bad debts"
because it is prepared on cash depreciation, outstanding
basis of accounting expenses etc. because it is
prepared on accrual basis of
accounting.
8. Opening Balance This account commences with This account does not
*
opening balance of cash and contain any opening balance
as like cash book and
bank.
receipts and payments
account.
9 Closing Balance Cash in hand and cash at bank Closing balance represents
are shown as the closing balance either surplus (if incomes
at the end of the accounting year. are more) or deficit (if
expenses are more)
10. Treatment of Closing The closing balance is recorded Closing balance of this
Balance at the end of the accounting account may result in
period and duly carried forward surplus or deficit. The
to the next period. Such carried amount of surplus will be
forward balance is shown as the added to the capital fund
opening balance in the next and in case of deficit will be
accounting year. subtracted from the capital
fund.
Distinction between Income and Expenditure Account & Profit and Loss Account
Both profit making and non-profit making organizations are preparing financial statements at the
end of the accounting year. As like profit & loss account, income & expenditure account records
all the revenue transactions including both expenditures and incomes related to current year. The
process of preparation of both the accounts is similar in nature despite of some basic differences.
These differences are described below:
SL. Basis of Profit & Loss Account

No. Difference
1. Nature  It is prepared by non-profit  It is prepared by trading or
making organizations. manufacturing concerns
2. Purpose  It is prepared with the intention to  It is prepared with an objective

ascertain surplus or deficit of the to find out the net profit or loss
revenue items of the concern. for the accounting period.
3. 3. Distribution  If there is any surplus arises, will  Profit ascertained during the
of Surplus or be added in capital fund. Such an course of business for any
Profit amount cannot be distributed accounting year will be
among members. distributed among the owners.
4. Extracted  It is prepared from the extracted  It is prepared from the
from information of Receipts and information given in the Trial
Payments. Account along with Balance and additional
additional information. information like adjustments.
5. Sources of  The major sources of income in  The major source of income in

Income this account are subscription, this accounts are revenue
donation and grants from the generated from the sale of
government. goods or rendering services by
the profit making concern.
6. Closing  This account shows surplus or  Net profit or Net Loss is
Balance deficit as its closing balance. shown as the closing balance.
Balance Sheet
Balance Sheet represents the financial position of the concern irrespective of trading or non-
trading, profit or non-profit making during the accounting year. The procedure followed in
preparation of balance sheet in case of non-profit organisation is the same like profit making
concerns. In a non-profit making organization, balance sheet is prepared at the end of the
accounting year. Assets of the organizations are shown on the Right Hand Side and Liabilities
are recorded on the Left Hand Side. The term capital used in the Balance Sheet of Profit making
concerns are replaced with a new term known as Capital Fund or Accumulated Fund or Corpus
Fund or General Fund. Because, Non-trading concerns do not have provisions for raising or
generating capital like that of trading organizations. The amount of Capital fund is calculated by
subtracting the amount of total outsider’s liabilities from the Total Assets. Balance sheet of such
concerns contains or records all the capital receipts and payments. The amount of surplus or
deficit resulted from the Income & Expenditure Account will be adjusted in the capital fund. In
all those cases, where the amount of capital fund is missing or absent, an opening balance sheet
is to be prepared for ascertaining the same. Marshaling of assets and liabilities of a non-profit
making concern can be done in the order of permanence. In this process, fixed assets are shown
first and current assets are shown thereafter. On the other hand, long term liabilities are shown
first and current liabilities are shown thereafter.
SPECIMEN OF BALANCE SHEET

Balance Sheet of as on…..
Liabilities Rs Assets Rs
Fixed Assets
Capital Fund xxx
Add : Surplus xxx xxx
Land and Buildings
[Or Less : Deficit] (xxx) xxx
Ground and Pavilion
xxx xxx
Sports Equipments
Add: Life Membership Fees xxx xxx
Mowing Machines
xxx Furniture & Fittings xxx
Add: Entrance Fees xxx Fixtures xxx
xxx Billiard Tables xxx
Add: Legacies xxx xxx Library Books xxx
Motor Vehicle xxx
Lunch xxx
Laboratory xxx
Tournament Fund xxx
Investment xxx
Add: Income from Tournament
Bicycle xxx
Fund Investments xxx
Less : Tournament Expenses xxx Crockery xxx
xxx Curtains xxx
Investments xxx
Prize Fund xxx Shares xxx
Add: Income from Debentures xxx
Prize fund Investment xxx Bonds xxx
Less : Prize Expenses xxx xxx Investments xxx
Shares xxx
Building Fund xxx Debentures or Bonds xxx
Match Fund xxx National saving xxx
Scholarship Fund xxx Certificates xxx
Poor and benevolent fund xxx Tournament Fund xxx
Endowment Fund xxx Investment xxx
Election Fund xxx Prize Fund Investment xxx
Loans xxx Match Fund Investment xxx
Special Subscriptions xxx Scholarship Fund xxx
Government grant for building xxx Investment xxx
Government grant for development xxx Endowment Fund xxx
Investment xxx
Donation for specific purpose xxx Endowment Fund xxx
Investment xxx
 Donation for Building xxx Govt. Loans/Securities xxx
 Donation for Books xxx Fixed Deposits xxx
 Donation for Computers xxx Stock of Refreshments xxx
 Donation for Instruments xxx Bar Stocks xxx
 Donation for Pavilion xxx Stock Medicines xxx
xxx Electric Installations xxx
Outstanding Expenses xxx Prepaid Expenses xxx
Income received in advance xxx Accrued Expenses xxx
Cash at Bank xxx
Cash in Hand xxx
xxx
xxxxxx xxxxxx
TREATMENT OF SOME IMPORTANT ITEMS

1. SUBSCRIPTION:
Subscription refers to a periodical contribution of a fixed amount by the members of a club or a

society towards their membership contribution. It is considered as a regular source of income of
a non-profit making concern received in a fixed duration i.e. monthly, quarterly or yearly. The
amount received as subscription is completely recorded in the receipts side of the Receipts and
Payments Account as revenue receipts. This amount so received may include subscriptions for
the current year, towards arrears related to previous year and received in advance for future
period of time. The Income and Expenditure Account records only the amount of subscriptions
related to the current accounting period. The total subscription relating to a particular accounting
period is recorded on the credit side of Income and Expenditure Account. Any subscription
outstanding (due but not received) and subscription received in advance at the end of the
accounting period are shown on the assets and liabilities side of the Balance Sheet respectively.
Subscriptions are recorded as per accrual basis of accounting and treated as an income.
Treatment of Subscription is made as follows:
CALCULATION OF SUBSCRIPTION TO BE SHOWN IN INCOME & EXP. ACCOUNT
Total Subscription received during the year (as per Receipt and XXX
payment account)
Add Subscription received in advance at the beginning of the year
XX
XX
Add Subscription outstanding or accrued at the end of the year XX
XX
Less Subscription outstanding at the beginning of the year
XX
Less Subscription received in advance at the end of the year
XX
Subscription to be taken to Income & Expenditure Account XX
Alternative Formula
Subscription Account can be used as an alternative option for calculation of the subscriptions
received during the year. The specimen of a subscription account is given below:
Dr. SUBSCRIPTION ACCOUNT Cr.
By Subscription received in advance

To Outstanding Subscription xxx
xxx (Opening)
(Opening)
By Bank (Subscription during the year)
To Income and Expenditure xxx
A/c. (Bal. figure) xxx
By Outstanding Subscription (Closing) xxx
To Subscription received in
Advance (Closing) xxx
Besides the above statement and account form, subscription for income and expenditure account
is calculated by the help of the following equation.
S1= SR + OS2 + AS1 - OS1- AS2
Where,
S1 = Subscription Income as per Income & Exp. A/c.
SR = Subscription received in the current period.
OS2 = Outstanding Subscription Closing
OS1= Outstanding Subscription Opening
AS2 = Advance Subscription beginning of year
AS2 = Advance Subscription end of the period.
a. Ignore the opening and closing cash and bank balances.

b. Ignore the capital receipts (e.g. life membership fees, donation for building etc.) and
capital payments (e.g. purchase of furniture, extension of buildings).
ILLUSTRATION – 3
Subscription received during 2016 40,000

Subscription due at the end 2016 12,000
Subscription due at the beginning 2016 4,000
Subscription received in advance at the end 6,000
Subscription received in advance in the beginning 5,000
Find out income for the year 2016
SOLUTION
CALCULATION OF SUBSCRIPTION
Rs.
Subscription received 2016 during the year 40,000
Add: subscription due at the end 12,000

Add: subscription received in advance in the beginning 5,000 17,000
57,000
Less: subscription received in advance at the end 6,000
Less: subscription due at the beginning 4,000
10,000
Subscriptions Received for the year 47,000
ILLUSTRATION – 4
During the year 2016-17, subscriptions received were Rs 1,20,000. Calculate the amount of
subscription to be shown in Income & Expenditure Account and Balance Sheet in each of the
following cases:
Case -1: If subscription outstanding for 31-3-2017 is Rs 25,000

Case -2: If subscription received in advance in the year 2016-17 is Rs 6,500.
Solution:
for the year ending 31st March, 2017
Particulars Amount Particulars Amount

By Subscriptions Received 1,20,000
Add: Subscriptions due
For the current year 25,000 1,45,000
Balance Sheet
as on 31-03-2017

Outstanding Subscriptions 25,000
Case – B

For the year ending 31st March, 2017

Add: Subscriptions received
In advance 6,500 1,13,500
Balance Sheet
as at 31-03-2017
Subscriptions received in advance 6,500
ILLUSTRATION – 5
Calculate the amount of subscriptions to be shown in Income & Expenditure Account for the
year ended 31st March 2017 from Purbasha Charitable Trust.
31-03-2016 31-03-2017
Outstanding Subscription Rs 40,000 Rs 50,000
Subscriptions received in advance Rs 3,000 Rs 4,000
Total amount of subscriptions received during the year 31-03-2017 is Rs 3,30,000. Show its
treatment in the Income and Expenditure Account and Balance Sheet as on 31st March 2017 and
31st March 2016.
Solution:
Books of Purbasha Charitable Trust

Dr Cr
Add: Outstanding Subscriptions
at the end of the year 50,000
3,80,000
Less: Outstanding Subscription
at the beginning of the year 40,000
3,40,000
Add: Advance Subscription at the
Beginning of the year 3,000
3,43,000
Less: Advance Subscriptions
at the end of the year 4,000 3,39,000
Balance Sheet
as at 31-03-2017

Balance Sheet
as at 31-03-2017

ILLUSTRATION – 6
From the following Receipts and Payments Account of Friends Club, Puri, show the treatment of
subscriptions in the Income and expenditure Account and Balance Sheet for the year ended 31 st
March 2017.

Dr Cr
To Subscriptions Received
2015-16 20,000
2016-17 2,30,000
2017-18 8,000 2,58,000
The Club has 1,400 members each paying Rs 180 as annual subscription. Outstanding
subscription as on 31-03-2016 was Rs 26,000.
Solution:
Income & Expenditure Account of Friends Club

Dr Cr
Add:
Outstanding Subscriptions for
the year ending 31-03-2017 22,000 2,52,000
Balance Sheet
as at 31-03-2017

Outstanding Subscriptions
Subscriptions received in advance 8,000 2016-17 22,000
2015-16 6,000 28,000
Balance Sheet
as at 31-03-2016

Working Notes:
Calculation of outstanding subscription for the year ended 31-03-2017
Total Subscription to be received for the year (1,400 x 180) Rs 2,52,000
Less: Total Subscriptions received for the year 2017 Rs 2,30,000
Outstanding Subscription for the year 2017 Rs 22,000
ILLUSTRATION – 7
From the information extracted from the Receipts & Payments Accounts of Mangala Charitable
Trust, show the treatment of the subscriptions received during the year in the Income and
Expenditure Account and Balance Sheet for the year ended 31 st March, 2012.

Dr Cr
To Subscriptions Received
2010-11 10,000
2011-12 1,78,000
2012-13 6,000 1,94,000
The Club has 2,000 members each paying Rs 95 as annual subscription. Outstanding
subscription as on 31-03-2011 was Rs 14,000.
Solution:
Income & Expenditure Account of Mangala Charitable Trust

Dr Cr
Add:
Outstanding Subscriptions for
the year ending 31-03-2012 12,000 1,90,000
Balance Sheet
as at 31-03-2012

Outstanding Subscriptions
Subscriptions received in advance 6,000 2011-12 12,000
2012-13 4,000 16,000
Balance Sheet
as at 31-03-2011

Working Notes:
Calculation of outstanding subscription for the year ended 31-03-2012
Total Subscription to be received for the year (2,000 x 95) Rs 1,90,000
Less: Total Subscriptions received for the year 2012 Rs 1,78,000
Outstanding Subscription for the year 2012 Rs 12,000
2. Life Membership Fees:
Life membership fees refer to the fees payable by the members to take the membership of a non-
profit making concern like club, charitable trust etc. for the entire life time. This is an easy option
for the members to avoid the issues of periodical subscription. In this process, a member or an
interested person desires to join can avail the option of being a life member. A lumpsum amount
is collected from the member at the time of joining in the organization. Life membership fee is of
non-recurring nature. It will be recorded as a liability and shown the liability side of the balance
sheet.
3. Donations:
Donation represents the amount received from the members and non-members from time to time
in a non-profit making organisation. Such donation received may be accepted for a general
purpose or for a specific purpose. This amount can be employed for the welfare or benefits of the
organisation. On the basis of the purpose, donations are classified into two parts such as General
Donation and Specific Donation.
(i) General Donation

General donations are received by a non-profit making organization for general purpose. This
will be treated as revenue receipts and shown in the credit side of the income and expenditure
account. Some accountants are of the view that if higher amount will be received as general
donations, then that will be taken as capital receipts and shown as a liability due to its non-
recurring nature. But currently it is a general practice to consider such donations are income.
(ii) Specific Donation
Specific Donations refer to the amount received as donation in a non-profit making concern for
meeting a specific purpose or objective. This purpose may be for construction of buildings,
repairs, renovations of the existing infrastructures, purchase of various fixed assets like furniture,
sports equipments, computers, and books etc. Specific donations are to be utilized or used for
meeting the desired purpose. Such a donation will be treated as capital receipt and shown in the
liabilities side of the balance sheet.
4. Endowment Fund:
Endowment Fund is a special fund created from the bequest, legacy or gifts received in the non-
profit making concerns. This is regarded as a permanent fund. It is a permanent fund created with
an intention to provide a regular financial support to the organizations. The principal amount of
these funds so created should be kept intact and the income on such investment can be used for
the benefit of the concern as specified in the Articles of Association. It is regarded as a capital
receipt. The amount of endowment funds is shown on the liabilities side of the balance sheet.
Any interest received from Endowment Fund Investments is credited to Income and Expenditure
Account.
5. Sale of Obsolete Items And Waste Papers:
The Non-profit making organizations have the option to sale various equipments, instruments,
bats, balls, wickets, carpet etc which became obsolete or wastage. The sale proceeds received
from the sale of these obsolete items and waste papers will be treated as revenue income and
shown on the credit side of income and Expenditure Account.
6. Sale of Fixed Assets:
The gross amount received from sale of various fixed assets like furniture, equipments,
buildings, mowing machines in a not-for profit making concern will be shown in the Receipts
and Payments Account. The book value of the asset sold on the date of sale will be subtracted
from the respective asset in the Balance Sheet. However, in case of profit or loss arises from the
sale of such assets, the same should be shown in the debit or credit side of the Income and
Expenditure Account accordingly.
7. Interest on Investments:
Interest on investment refers to the amount of interest received from the total investment during
the accounting year. In case of non-profit making concerns, the amount received or to be
received during the accounting year is considered as income. This amount is shown on the credit
side of the Income and Expenditure Account. Interest may also be received on General Fund
Investments or Specific Fund Investments. Interest so received on general fund investment is
treated as income and credited to Income and Expenditure Account. This fund is invested to earn
interest for meeting day to day expenses of the organisation. Interest on Specific Fund
Investments is not credited to Income and Expenditure Account. It will be added with the amount
of specific fund on the liability side of the balance sheet. This fund is specifically used for
meeting some given purpose.
8. Expenses on Specific Funds:
Any expense incurred relating to the specific fund will be subtracted from the same on the
liability side of the balance sheet. It will not be treated as an expense in the Income and
Expenditure Account. On the other hand, if the total expenses incurred related to the specific
fund exceed the balance of specific fund (including the interest on specific fund investments), the
excess amount is debited to Income and Expenditure Account. In other words, the expenses
connected with this fund will be deducted from the specific fund on the liability side of the
balance sheet. This expense will be debited to Income and Expenditure Account when the
specific fund will get exhausted.
9. Government Grants:
Grants refer to the financial assistance provided by Government to meet some specific purpose
or general purpose from time to time to a non-profit making concern. It is considered as one of
the important source of revenue for such organizations. The amount received as government
grants are recorded in the receipts side of the Receipts and Payments Account. In case of specific
grants, the entire amount is to be capitalized and shown on the liabilities side of the balance
sheet. On the other side, general grants are considered as of routine nature and shown on the
credit side of the Income and Expenditure Account. Govt. grants are basically of two types:
(i) Grants for maintenance.

(ii) Grants for development.
The maintenance grant is sanctioned by the Government for meeting the day to day expenses of a
non-profit organisation. It is considered as an income and credited to Income and Expenditure
Account. The development grant allotted by the Government is generally intended for
acquisition of fixed assets. A development grant is of non-recurring nature and shown on the
liability side of the balance sheet.
10. Honorarium:
Honorarium represents the payment made to a person for rendering some sorts of services for a
non-profit making organization other than the employee of that concern. It can be illustrated with
the example of the payment made to a Professor of Utkal University for delivering a special
lecturer in the Auditorium of Lions Club, Bhubaneswar, Fees paid to an artist or singer to
perform on the occasion of the Annual Day of a Club etc. Honorarium so paid is regarded as
expenditure and will be debited to income and expenditure account.
11. Entrance Fees:
Entrance Fees represents the amount received from the interested persons wanted to be a member
of any non-profit making organization at the time of admission. This is otherwise termed as
admission fees. This amount is shown on the receipts side of receipts and payments account.
There are differences in opinion about entrance fees. Some people have treated entrance fees as a
capital receipts and shown on the liability side of the balance sheet. According to this group of
people, entrance fees are collected once during the life time of the membership at the time of
enrollment or admission. These receipts are of non-recurring nature and required to be
capitalized. There is another group who have advocated against this thought. They have their
own opinion and stand point to prove. According to them, in a non-profit making organization,
admission or enrolment of members is to be undertaken each and every year as a continuous
process. Hence, receipt of such entrance fees should be treated as recurring nature. Therefore, it
should be treated as income and shown on the credit side of the Income & Expenditure Account.
In the absence of specific instructions any one of the above treatment may be made. Students
should append a note about their treatment of entrance fees. They have to clearly mention
whether they are considering entrance fees as an income or as a capital receipts.
12. Legacy:
Legacy refers to the amount received by a non-profit making concern under a will on death from
a donor or contributor. The reasons behind such contribution by the deceased person may be
specific or general. The amount so received is shown on the receipts side of receipts and
payments account. It is regarded as of non-recurring nature and hence capitalized. Legacies
received for some specific purpose should be capitalized and added with the respective fund for
which it has been received. On the other side, legacies received for general purpose may be
added to the capital fund. In both the cases, the amount received as legacies will be shown on the
liabilities side of the balance sheet.
Calculation of Materials Consumed during an accounting year
Particulars Amount
Rs
Opening stock of Materials xxx
Add: Materials purchased during the year xxx
Less: Closing Stock of materials xxx

Materials Consumed (To be shown in the Income & Expenditure Account) xxx
Calculation of Materials purchased during the year

Particulars Amount Amount
Rs Rs
Amount paid for material during the year xxx
Add: Creditors for materials at the end of the current year xxx
Advance paid for material in the previous year xxx xxx
Less: Creditors for material at the end of the previous year xxx
Advance paid for material in the current year xxx (xxx)
Materials purchased during the year xxx
ILLUSTRATION – 8
From the following information, calculate the amount of stationary consumed to be shown on
the debit side of the Income & Expenditure Account for the year ending 31 st March 2017.
Rs
Stock of stationery (01-04-2016) 10,000
Creditors for stationery on 01-04-2016 6,000
Advance paid for stationary on 31 st March 2016 2,000
Amount paid for stationery during the year 2016-17 20,000
Advance paid for stationery on 31 st March 2017 800
Solution:
Calculation of Materials Consumed during an accounting year 2016-17

Rs Rs
Add: Creditors for stationery on 31-03-2017 4,500
Advance paid for stationary on 31 st March 2016 2,000 26,500
Less: Creditors for stationery on 01-04-2016 6,000

Advance paid for stationary on 31 st March 2017 800 6,800
Stationery purchased during the year 19,700
Particulars Amount
Rs
Opening stock of Stationery 10,000
Add: Stationery purchased during the year 19,700
Less: Closing Stock of Stationery 15,000
Materials Consumed (To be shown in the Income & Expenditure Account) 14,700
ILLUSTRATION – 9
Calculate the amount of stationery consumed during the calendar year 2016.
Rs
Stock of stationery as on January 1, 2016 5,000
Creditors for stationery on January 1, 2016 2,000
Advance paid for stationery carried from 2015 200
Amount paid for stationery during the year 10,000
Stock of stationery on December 31, 2016 500
Creditors for stationery for December 31, 2016 1,500
Advance paid for stationery on December 31, 2016 1,300
Solution:-
Rs
Opening Stock on 1.1.2016 5,000
Add- Amount paid in 2016 10,000
15,000
Less- Creditors for stationery on 1.1.2016 2,000
13,000
Add- Advance Paid carried forward from 2015 200
13,200
Less – Advance paid on 31.12.2016 1,300
11,900
Add- Creditor for stationery 1,500
13,400
Less- Stock on 31.12.2016 500
Amount of Stationery Consumed 12,900
CALCULATION OF REVENUE INCOME

Rs
Revenue Receipts as per Receipts and Payment Account xxx
Add: Outstanding Income (closing) xxx
Add: Income received in advance (beginning) xxx xxx
Less: Outstanding Income (beginning) xxx
Less: Income received in advance (closing) xxx
Income for the current period xxx
ILLUSTRATION – 10
Treat the following items during the preparation of the Income & Expenditure Account for the
year ending 31st December 2016 in respect of Ram Rahim Club.
Particulars 31-03-2016 31-03-2017

Outstanding Interest 12,500 16,000
Interest received in advance 2,000 6,500
Interest received during the year 2016-17 Rs 1,20,000.
Solution
Calculation of Income for the year 2016-17

Particulars Amount
Rs
Interest received during the year 1,20,000
Add: Outstanding Interest (closing) 16,000
Add: Interest received in advance (beginning) 2,000
Less: Outstanding Interest (beginning) 12,500
Less: Interest received in advance (closing) 6,500
Income from interest related to the current accounting year 1,19,000

(To be shown in Income & Expenditure Account Credit Side)
CALCULATION OF REVENUE EXPENSES

Rs
Revenue Payments as per Receipts and Payment Account xxx
Add: Outstanding Expenses (closing) xxx
Add: Expenses paid in advance (beginning) xxx xxx
Less: Outstanding Expenses (beginning) xxx
Less: Expenses paid in advance (closing) xxx
Expenses incurred during the current accounting period xxx
ILLUSTRATION – 11
Treat the following items during the preparation of the Income & Expenditure Account for the
year ending 31st December 2016 in respect of Eklabya Club.
Particulars 31-03-2016 31-03-2017

Outstanding Rent 20,500 11,850
Prepaid Rent 2,500 3,150
Rent paid during the year 2016-17 amounted Rs 82,500.
Solution
Calculation of Expenses for the year 2016-17
Particulars Amount
Rs
Rent paid during the year 82,500
Add: Outstanding Rent (closing) 11,850
Add: Prepaid Rent (beginning) 2,500
Less: Outstanding Rent (beginning) 20,500
Less: Prepaid Rent (closing) 3,150
Amount of Rent related to the current accounting year 73,200

(To be shown in Income & Expenditure Account Debit Side)
CALCULATION OF DEPRECIATION
Particulars Amount
Rs
Opening Balance of Asset xxx
Add: Purchase of asset xxx
Less: Closing balance of asset (xxx)
Depreciation to be charged to Income & Expenditure A/c xxx
ILLUSTRATION – 12
From the following information extracted from the books of Pooja Orphanage Home, calculate
the amount of depreciation to be charged to Income and Expenditure Account for 31-3-17.
01-4-16 31-03-17
Machinery Rs.20,000 Rs.30,000

Purchase of machinery during the year Rs.16,000. Sale of furniture during the year Rs.3,000.
Solution:
Calculation of Depreciation
Rs.
Opening Stock of Machinery 20,000
Add : Purchase of machinery during the year 16,000
36,000
Less : Sale of machinery during the year 3,000
33,000
Less : Closing balance of machinery 30,000
Depreciation to be charged to the Income & Expenditure Account 3,000
Treatment of Expenses and Incomes when a Specific Fund is given
ILLUSTRATION – 13
How will you deal with the following information at the time of preparing financial statements of
Bengal Tiger Club for the year ended 31-3-17.
Prize Fund 1-4-2016 1,00,000

Prizes awarded 35,000
Donations for prizes received 29,000
Solution:
BALANCE SHEET OF BENGAL TIGER CLUB
as on 31st March, 2017
Liabilities Rs. Assets Rs.

Prize Fund:
Opening Balance 1,00,000
Add: Donation 29,000
1,29,000
Less: Prizes awarded 35,000 94,000
Note. In this case, prizes awarded will not be shown in debit side of Income & Expenditure
Account because it has been adjusted from prize fund in the balance sheet.
ILLUSTRATION – 14
How will you deal with the following items while preparing the final accounts of Puri Club
as on 31st March, 2017.
Debit Balance Credit Balance
Sports Fund 76,000

Sports Fund Investments 76,000
Interest on Sports and Fund Investments 8,200
Sports Expenses 4,650
Sports Fees Collected 1,450
SOLUTION
BALANCE SHEET OF PURI CLUB

as on 31st March, 2017

Sports Fund : 76,000 Sports Fund Investments 76,000
Add : Interest on Sports 8,200
Fund Investments
Add : Sports Fee Collected 1,450
85,650
Less : Sports Expenses 4,650 81,000
ILLUSTRATION – 15
Prepare an Income & Expenditure Account from the following information extracted from
Narishakti Trust, Ganjam for the year ended 31 st March, 2017.
RECEIPTS & PAYMENTS ACCOUNT

Receipts Rs. Payment Rs.

To Balance b/d 4,000 By Furniture 8,000
To Subscriptions 25,000 By Equipments 10,200
To Donations 12,000 By Investment 7,800
To Entrance Fees 2,000 By Salaries 3,500
To Sale of old news paper 500 By Telephone Charges 2,500
To Hall Rent Received 1,500 By Printing & Stationery 1,000
By Balance c/d 12,000
45,000 45,000
Additional Information
(a) Outstanding subscription as on 31-03-2017 amounted to Rs 2,000.

(b) Outstanding salary Rs 600.
(c) 60% of Entrance Fees are to be capitalized.
(d) Depreciation is charged @ 10% p.a. on furniture.
SOLUTION
Dr Cr
Expenditure Rs Income Rs
To Salaries 3,500 By Subscriptions 25,000
Add: Outstanding Salary 600 4,100 Add:
To Telephone Charges 2,500 Outstanding Subscription 2,000 27,000
To Printing & Stationery 1,000 By Donations 12,000
To Depreciation on furniture 800 By Entrance Fees 800
To Surplus 33,400 (40% to be treated as income)
(Excess of Income over Expenditure) By Sale of old news paper 500
By Hall Rent Received 1,500
41,800 41,800
ILLUSTRATION 16
From the following Receipts and Payments Account of Crown Club, prepare the Income and
Expenditure Account for the year ending 31st March, 2017.
RECEIPTS AND PAYMENTS ACCOUNT


To Balance b/d 3,150 By Rent 2,000
To Annual Subscriptions 7,900 By Salaries 2,900
To Entrance Fees 1,400 By Prizes Awarded 4,700
To Donations 2,550 By Office Expenses 1,000
To Sale of Grass 1,000 By Miscellaneous Expenses 1,250
16,000 16,000
On 1st April, 2016 subscriptions in arrears amounted to Rs 2,600 and on 31st March, 2017 was
Rs. 3,200. An amount of Rs.500 was due for salary at the end of the year. Half of the entrance
fees are to be capitalized.
SOLUTION

Dr Cr
Expenditure Rs Income Rs
Add: Outstanding Salary 500 3,400 Add: Closing
To Rent 2,000 Outstanding Subscription 3,200
To Prizes awarded 4,700 Less: Opening
To Office Expenses 1,000 Outstanding Subscription 2,600 8,500
To Miscellaneous Expenses 1,250 By Donations 2,550
To Surplus 400 By Entrance Fees 700
(Excess of Income over Expenditure) (50% to be treated as income)
By Sale of Grass 1,000
12,750 12,750
ILLUSTRATION 17
The following informations are extracted from the Receipts and Payments Account of
Bhubaneswar Club for the year ended 31-3-16. You are required to prepare Income &
Expenditure Account using the additional information.
RECEIPTS & PAYMENT ACCOUNT

for the year ended 31-3-16

To Subscription: By Furniture 8,000
31-3-15 6,000 By Printing & Stationery 2,400
31-3-16 37,000 By Equipments 10,000
31-3-17 3,000 46,000 By Telephone charges 4,000
To Sale of old news papers 1,170 By Salaries 7,000
To Sale of grass 1,030 By Travelling 6,000
To Interest on Bank Deposits 2,400 By Newspapers 4,000
53,000 53,000
Additional Information:
1. Salaries outstanding Rs.2,200 on 31-3-16

2. Rent outstanding Rs.2,750 on 31-3-16
3. Depreciation equipments @ 20% p.a.
4. Subscription due 31-3-16 Rs.4,000
SOLUTION
INCOME & EXPENDITURE ACCOUNT

Dr. for the year ended 31-3-16 Cr.
Expenditures Rs. Incomes Rs.
To Rent 7,000 By Subscription 37,000
Add: Outstanding Rent 2,750 9,750
To Printing & Stationery 2,400 Add : Due 4,000 41,000
To Depreciation on By Sale of old Newspapers 1,170
Equipments 2,000
To Telephone charges 4,000 By Interest on Bank 3,000
deposits
To Salaries 7,000 By Sales of Grass 1,030
Add Salary Outstanding 2,200 9,200
To Travelling 6,000
To Newspapers 4,000
To Surplus 8,850
46,200 46,200
ILLUSTRATION 18
From the following Receipts and Payments Account of Phulbani Club, Prepare the Income and
Expenditure Account for the year 31st March, 2017.


To Subscriptions 1,76,000 By Salaries 50,000
To Donations 1,53,000 By Printing & Stationery 12,450
To Interest on Investment 2,000 By Repair 7,000
To Entrance Fees 38,200 By Billiard Table 58,070
To Interest from Banks 2,000 By Investment 61,980
To Sale of old Newspaper 6,900 By Miscellaneous Exp. 6,600
By Furniture 1,23,000
By Insurance 2,700
3,83,600 3,83,600
Adjustments-
a. Subscriptions in Arrears for the year ended 31st March, 2017 are Rs 8,500 and
Subscription in Advance for the year ended 31st March, 2017 - Rs 1,000.
b. Prepaid Insurance amounted to Rs 1,200.
c. Miscellaneous Expenses outstanding Rs 800.
d. 60% of Donation is to be capitalized.
e. Entrance fees are to be taken as Revenue Receipt.
Solution:
Phulbani Club
Income and Expenditure Account
for the year ended 31st March 2017
Expenditures Amount Incomes Amount

To Salaries 50,000
To Printing & stationery 12,450 By Subscriptions 1,76,000
To Repair 7,000 Add- outstanding 8,500
To Misc. Expenses 6,600 1,84,500
Add- Outstanding 800 7,400 Less- Advance 1,000 1,83,500
Donations (40%) 61,200
To Insurance Premium 2,700 Interest on Investment 2,000
Less – Prepaid 1,200 1,500 Entrance Fees 38,200
To Surplus Interest received from Bank 2,000
(Excess of Income over Expenditure) 2,15,450 Sale of old News Paper 6,900
2,25,000 2,93,800
ILLUSTRATION 19
Following is the receipts and payments account of Azad Club for the first year ended 31st
March, 2017.


To Subscriptions 20,000 By Salaries 4,200
To Interest on investments 1,500 By Postage 3,800
By Rent 2,350
By Telephone charges 1,650
By Printing and 500
stationery
By Furniture 2,120
By Investments 4,180
21,500 21,500
Additional information:
1. Salaries outstanding Rs.1,300.

2. Rent due Rs.450.
3. Subscriptions to be received for the year 2016-17 is Rs.2,500.
4. Depreciation on furniture 10%.
5. Capital fund in the beginning amounted to Rs 25,000.
6. At the beginning of the year, the balance of Books was Rs 18,000 and Equipments Rs
7,000.
Prepare income and expenditure account for the year ended March, 2017 and Balance
Sheet as on that date.
Solution
INCOME AND EXPENDITURE ACCOUNT OF AZAD CLUB

Dr. for the year ending 31st March, 2017 Cr.
Add: Outstanding 1,300 5,500 Add: Subscription due 2,500 22,500
To Postage 3,800 By Interest on investments 1,500
To Rent 2,350
Add: Outstanding 450 2,800
To Telephone charges 1,650
To Printing and 500
stationery
To Depreciation on 212
furniture
To Surplus 9,538
(Excess of Income over
Expenditure)
24,000 24,000
BALANCE SHEET
as on 31stMarch, 2017
Furniture 2,120
Capital fund 25,000 Less: Depreciation@ 10% 212 1,908
Add: Surplus 9,538 34,538 Equipments 7,000
Books 18,000
Investments 4,180
Outstanding salaries 1,300 Subscriptions outstanding 2,500
Rent due 450 Cash 2,700
36,288 36,288
ILLUSTRATION 20
Following is the summery of cash transactions of Happy Club for the year ended 31 st March
2017. Prepare the Income and Expenditure Account for the year ended 31 st March, 2017 and also
the Balance Sheet on that date.

To Balance b/d 14,000 By Salaries 9,000

To Entrance Fees 5,000 By Rent and Taxes 8,200
To Subscriptions 20,000 By Electricity Charges 3,800
To Donations 10,000 By General Expenses 1,120
To Interest 400 By Telephone Charges 3,000
To Profit from Entertainment 600 By Office Expenses 4,100
50,000 50,000
Additional Informations
i) In the beginning of the year, the club had Books worth Rs 30,000 and Furniture worth Rs
15,000.
ii) Subscriptions in Arrears on 1 st April 2016 were Rs 1,000 and Rs 1,300 on 31st March
2017.
iii) Rent due at the end of the year amounted to Rs 800.
iv) Depreciation charged 10% on furniture and 15% on books.
v) On 31st March 2017, Salaries Rs 1,600 and Electricity charges Rs 300 were outstanding.
Solution:-

Dr Cr
To Rent and Taxes 8,200 By Subscriptions 20,000
Add Outstanding at the end 800 9,000 Add-
Arrears at the end 1,300
To Salaries Paid 9,000 21,300
Add- Outstanding 1,600 10,600 Less-
Arrears at the beginning 1,000 20.300
To Electricity Charges 3,800 By Donations 10,000
Less – Prepaid - 300 3,500 By Interest 400
By Entrance Fees 5,000
To Telephone Charges 3,000 By Profit from entertainment 600
To General Expenses 1,120 By Deficit
To Office Expenses 4,100 (Excess of Expenditure over Income) 270
To Depreciation-
Books 3,000
Furniture 2,250 5,250
36,300 36,300
Balance Sheet of Happy Club

as on 31st March 2017
Liabilities Amount Assets Amount

Cash in Hand 4,480
Capital Fund Investments 16,300
In the beginning (WN) 60,000 Books (Beginning) 30,000
Less- Deficit 270 59,730 - Depreciation 3,000 27,000
Rent Outstanding 800
Salaries Outstanding 1,600 Furniture 15,000
Less- Dep. 2,250 12,750
Subscriptions outstanding 1,300

Prepaid Electricity Charges 300
62,130 62,130
Working Note:
Calculation of Opening Capital Fund
Balance Sheet
Capital Fund (Bal. Fig) 60,000 Cash 14,000
Subscriptions Outstanding 1,000
Books 30,000
Furniture 15,000
60,000 60,000
ILLUSTRATION 21
From the following Receipts and Payments Account of Royal Challengers Club and from the
information supplied, prepare the Income and Expenditure Account for the year ended 31 st
December, 2016 and the Balance Sheet as at that date:


To Subscriptions By Salaries 14,000
2015 2,500 By Electricity Charges 2,000
2016 10,000 By General Expenses 3,000
2017 2,000 14,500 By Books 5,000
By Insurance 4,000
To Rent Received 7,000 By Balance c/d 2,000
To Profit from Entertainment 3,000
To Sales of Grass 2,000
30,000 30,000
1. The club has 50 members each paying an annual subscription of Rs 250. Subscriptions
outstanding on 31st December 2015 were to the value of Rs 3,000.
2. On 31st December, 2016 Salaries Outstanding amounted to Rs 1,000 and Rs 3,000 on 31st
December, 2015.
3. On 1st January, 2016, the club owned building valued at Rs 1,00,000. Furniture worth Rs
10,000 and Books Rs 10,000.
Solutions:-
Royal Challengers Club

for the year ended 31st December 2016
Dr Cr
By Subscriptions 12,500
(50 x 250)
To Salaries Paid 14,000 Profit from entertainment 3,000
Add- Sale of Grass 2,000
Closing Outstanding 1,000 Rent received 7,000
15,000
Less: Opening Outstanding 3,000 12,000
Electricity Charges 2,000
General Expenses 3,000
Insurance 4,000
Surplus- Excess of Income over 3,500

Expenditure
24,500 24,500
Balance Sheet of Royal Challengers Club
as on 31st December, 2016

Cash in Hand 2,000
Capital Fund (WN-1) 1,23,500 Books (Beginning) 10,000
Add- Surplus 3,500 1,27,000 Additions 5,000 15,000
Salaries Outstanding 1,000
Subscription received in advance 2,000 Furniture 10,000
Subscriptions Outstanding
2015 (3000- 2500) 500
2016 (W.N. 2) 2,500 3,000
Building 1,00,000
1,30,000 1,30,000
Working Notes
1. Calculation of Capital Fund as on 1st January, 2016.
Balance Sheet of Royal Challengers Club

as on 31st December, 2016
Capital Fund (Bal. Fig) 1,23,500 Cash 3,500
Salaries Outstanding 3,000 Subscriptions Outstanding 3,000
Books 10,000
Building 1,00,000
Furniture 10,000
1,26,500 1,26,500
2. Subscriptions due for 2016 (250 x 50) Rs 12,500

Less – Subscriptions received for 2016 Rs 10,000
Subscriptions outstanding for 2016 Rs 2,500
ILLUSTRATION 22
Following is the Receipts and Payments Account of the Raj Memorial Association for the
year 31st December, 2016.


To By
Balance b/d 2,500 Salaries 30,000
Bank Balance 24,500 Rent and Taxes 6,000
Subscriptions 40,000 Printing & Stationery 1,500
Bank Interest 200 Postage 400
Sale of Old Car 4,000 Typewriter Purchased 4,000
Investments 8,000
Bank Balance 20,000
71,200 71,200
Investments were purchased on 1st July 2016 and yielded interest @ 5% p.a. Subscriptions
included Rs 8,000 for 2015 and Rs 4,000 for 2017. Subscriptions for 2016 still in arrears were Rs
8,000. Rent for December 2016 Rs 500 is still unpaid. Rs 300 are payable against a bill for
stationery. The book value of the car was Rs 5,500.
Prepare the Income & Expenditure Account for the year ended 31 st December, 2016 and the
Balance Sheet as at that date.
Solution:-
Raj Memorial Association

Dr Cr
To By
Salaries 30,000 Subscriptions 40,000
Rent Paid 6,000 Less- Received for 2015 8,000
Add- Outstanding + 500 6,500 Received for 2017 4,000
28,000
Printing & Stationery 1,500 Add – Outstanding (2016) 8,000 36,000
Add- Outstanding + 300 1,800 Interest from Bank 200
Interest on Investment 200
Postage 400 [8,000 x 5/100 x 6/12 = Rs 200]
Loss on sale of old car (5,500 – 4,000) 1,500 By deficit – Excess of Expenditure
over Income 3,800
40,200 40,200
Balance Sheet of Raj Memorial Association
as at 31st December, 2016

Cash in Hand 1,300
Capital Fund (WN-1) 40,500 Cash at Bank 20,000
Less-Deficit 3,800 36,700 Subscriptions Outstanding 8,000
Outstanding Accrued Interest 200
Rent 500 Investments 8,000
Printing & Stationery 300 Typewriter 4,000
Subscription received in advance 4,000
41,500 41,500
Working Notes:
Calculation of the opening Balance of Capital Fund
Balance Sheet
as on 1st January 2016
Capital Fund (Bal. Fig) 1,23,500 Cash 2,500
Bank 24,500
Subscriptions Outstanding 8,000
Car 5,500
40,500 40,500
ILLUSTRATION 23
Following statement is submitted to you by the Secretary of The Subham Society for the year
ended 31st March 2016.


To By
Entrance Fees 4,000 Rent and Taxes 7,440
Subscriptions Electricity 3,120
2014-15 1,000 Printing & Stationery 1,320
2015-16 12,200 Insurance premium 720
2016-17 1,400 14,800 General Expenses 1,840
Sale of Investment 30,000 Purchase of Furniture 18,000
Loan taken from Mr. Ram 8,000
60,680 60,680
Additional Informations:
Outstanding and prepaid expenses on 31st March were:
2015 2016
(Rs) (Rs)
Rent Due 720 1,440
Electricity Bill Due 2,560 800
Subscription Due 1,000 1,600

Prepaid Insurance 200 280
ii. Cost of Investments sold was Rs 20,000. The surplus is to be treated as Income.
iii. On 31st March 2015, book value of furniture was Rs 12,000. New furniture was purchased on
1st October 2015. Depreciation is to be provided @10%.
iv. Entrance Fees are to be treated as revenue.
v. Loan from Mr. Ram was taken on 1st October, 2015. Interest @10% p.a. is payable thereon.
It is required to prepare the Income and Expenditure Account of the club for the year ended 31 st
March, 2016 and the Balance Sheet as at that date.
Solution:-
Subham Society

Dr Cr

To By
Salaries 18,640 Subscription(WN2) 13,800
Rent (W.N.4) 8,160 Entrance Fees 4,000
Printing & Stationery 1,320 Profit on sale of Investment 10,000
General Expenses 1,840 (Rs 30,000 – Rs 20,000)
Insurance (W.N.3) 640 By deficit – Excess of Expenditure
Electricity (W.N.5) 1,360 over Income 6,660
Interest on Loan (for 6 months) 400
Depreciation on Furniture(WN 6) 2,100
34,460 34,460
Balance Sheet of Subham Society
as at 31st March, 2016

Furniture 12,000
Capital Fund (WN-1) 34,000 Addition 18,000
Less-Deficit 6,660 27,340 30,000
Loan from Mr. Smart 8,000 Less- Depreciation 2,100 27,900
Add. Interest Accrued 400 8,400
Cash in Hand 9,600
Outstanding Prepaid Insurance 280
Rent 1,440 Subscription in Arrears 1,600
Printing & Stationery 800 2,240
Subscription received in advance
39,380 39,380
Working Notes:
1. Calculation of the opening Balance of Capital Fund
Balance Sheet

Furniture 12,000
Creditors for – Subscriptions Outstanding 1,000
Rent 720 Investment 20,000
Electivity 2,560 3,280 Prepaid Insurance 200
37,280 37,280
2. Calculation of subscriptions received for the year
Subscription Account
Dr Cr
Subscriptions Outstanding 1,000 Cash 14,800
Income & Expenditure A/c (B/f) 13,800 Subscriptions Outstanding 1,600
Subscriptions Rec. in Advance 1,400
16,200 16,200
3. Insurance premium to be debited to Income and Expenditure Account

= Prepaid Premium (opening) + paid during the year – prepaid premium (end)
= Rs 200 + Rs 720 – Rs 280 = Rs 640
4. Rent to be debited to Income & Expenditure Account

= Rent paid during the year + Rent due (end) – Rent Due (Opening)
= Rs 7,440 + Rs 1,440 – Rs 720 = Rs 8,160.
4. Electricity to be debited to Income and Expenditure Account

= Electricity bill paid during the year + Bill Due (end) – Bill Due (opening)
= Rs 3,120 + Rs 800 – Rs 2,560 = Rs 1,360
5. Depreciation on Furniture: Rs
On Rs 12,000 for 1 Year 1,200
On Rs 18,000 for 6 months 900
2,100
ILLUSTRATION 24
Following is the Receipts and Payments Account of Real Madrid Club for the year ended
31st December, 2016.


To By
Entrance Fees 670 Bank Overdraft 3,100
Subscriptions Furniture 1,450
2014-15 300 Investment in Securities 3,000
2015-16 16,200 Printing and Stationery 890
2016-17 150 16,650 Miscellaneous Expenses 1,420
Income from Entertainment 290 Bank Balance 3,100
Interest on Securities 600 By Balance c/d 550
19,710 19,710
Prepare the Income and Expenditure Account of the club for the year ended 31 st
December, 2016 and the balance Sheet as at that date having due regard to the following
additional information:
1. The club has 1,800 members, each paying an annual subscription of Rs 10.
Subscriptions amounted to Rs 90 are in arrears in respect of the year 2015.
2. Stock of Stationary on 31st December, 2015 was Rs 125 and on 31st December, 2016 Rs
87.
3. Entrance Fees are to be capitalized.
4. Salary of Rs 550 for December 2016 is outstanding. Expenses accruing on 31st
December, 2015, amounted to Rs 132. The club paid Rs 500 in the year 2015 towards
Telephone Charges of which Rs 125 relate to 2016.
5. As on 31st December, 2015 Premises stand in the books at Rs 24,500 and Investments at
Rs 6,500. Depreciate Premises and Furniture’s by 10% p.a. (Furniture was purchased
on 1st January, 2016.)
Solution:
Real Madrid Club

To By
Salaries 6,200 Subscription(1,800 x 10) 18,000
Add- Outstanding 550 6,750 Income from Entertainment 290
Printing & Stationery 890 Interest on Securities 600
Add- Opening Stock 125
1015
Less- Closing Stock 87 928
Misc. Exp. 1,420
Less Opening Outstanding 132 1,288
Telephone Charges 125
Depreciation on:
Premises 2,450
Furniture 145 2,595
To Surplus –
Excess of Income over Expenditure 7,204
18,890 18,890
Balance Sheet as on 31st December, 2016

Cash in Hand 550
Capital Fund (WN-1) 29.908 Cash at Bank 3,100
Entrance Fess 670 Subscription in Arrears
Add-Surplus 7,204 37,782 2008 90
2009 (WN 2) 1,800 1,890
Subscription Outstanding 550 Investments (6,500 + 3000) 9,500
Subscription received in advance 150 Premises 24,500
Less- Dep. 2,450 22,050
Furniture 1,450
Less- Depreciation 145 1,305
Stock of Stationery 87
38,482 38,482
Working Notes:
1. Calculation of the opening Balance of Capital Fund
Balance Sheet as on 1st January 2016

Investment 6,500
Bank Overdraft 3,100 Premises 24,500
Misc. Exp. Outstanding 132 Prepaid Telephone Charges 125
Subscription Outstanding
(300 +90) 390
Stock of Stationery 125
33,140 33,140
1. Outstanding Subscriptions in 2016 amounted to Rs 1,800.
Subscriptions of 1800 members @ Rs 10 each Rs 18,000
Less – Received during 2016 Rs 16,200
Subscriptions outstanding for 2016 Rs 1,800

Important Terms
Non-profit making organization
Receipts and Payment Account
Subscription
Capital Fund
Life Membership Fees
Donation
Entrance Fees
Legacy
Honorarium
Endowment Funds
Government Grants
Specific Donations
Model Exercise Questions
GROUP - A
Q. 1 From the following alternatives, write serially the correct answer along with its
serial number against each bit:
(i) Income and Expenditure Account is prepared to know:

a. Net Profit
b. Gross Profit
c. Financial Position
d. Excess of Income over Expenditure [CHSE – 2016]
(ii) Receipt and Payment Account is prepared in lieu of

a. Profit and Loss Account
b. Balance Sheet
c. Profit and Loss Adjustment Account
d. Cash Book [CHSE – 2016,2011]
(iii) Donations received for a special purpose will be treated as:

a. Liability
b. Expenditure
c. Income
d. Asset [CHSE – 2015]
(iv) Legacy is usually shown as a/an
a. Expenditure
b. Asset
c. Liability
d. Income [CHSE – 2015]
(v) Income & Expenditure Account reveals

a. Gross Profit
b. Net profit
c. Excess of Income over Expenditure
d. Cash at the end of the year [CHSE – 2014]
(vi) Income & Expenditure Account is prepared in lieu of

a. Cash Book
b. Trading Account
c. Profit & Loss Account
d. Balance Sheet [CHSE – 2014,2013,2012,2009]
(vii) Receipts and Payments Account reveals
a. Net Profit
b. Gross Profit
c. Financial Position
d. Cash Balance [CHSE – 2014,2013,2012]
(viii) Outstanding Subscription is

a. An asset
b. A liability
c. An income
d. An expense [CHSE – 2014]
(ix) The subscription received in advance is

a. Asset
b. Liability
c. Income
d. Expense [CHSE – 2013,2010]
(x) Difference between the two sides of the Receipts & Payments Account reveals
a. Net Profit/Loss
b. Net Cash Balance
c. Surplus/Deficit
d. None of these [CHSE – 2010]
(xi) Income & Expenditure Account is the other name of
a. Trading Account
b. Profit & Loss Account
c. Balance Sheet
d. Profit & Loss Adjustment Account [CHSE – 2008]
(xii) Life membership fees received

a. May be capitalized
b. May be taken as revenue receipt
c. Should be capitalized
d. Should be taken as revenue receipt
(xiii) Receipt of legacy should be treated as

a. Revenue receipt
b. A capital receipt
c. Both of these
d. None of these
(xiv) If a sports fund is created, then sports expenses are transferred to

a. Income and Expenditure Account
b. Sports Fund
c. Sports Fund Investment
d. None of these
(xv) Special Fund usually appears in

a. Balance Sheet
b. Income & Expenditure Account
c. Liability side of the Balance Sheet
d. None of these
Answers: (i) Excess of Income over Expenditure, (ii) Cash Book, (iii) Liability, (iv)
Liability, (v) Excess of Income over Expenditure, (vi) Profit & Loss Account, (vii) Cash
Balance, (viii) An asset, (ix) a liability, (x) Net Cash Balance, (xi) Profit & Loss Account,
(xii) Should be capitalized, (xiii) a Capital Receipt, (xiv) Sports Fund, (xv) Liability side of
the Balance Sheet
Fill in the blanks
(i) Opening statement of affairs is prepared to find out the opening balance of _______ fund.
(ii) Honorarium paid is ________ to Income & Expenditure Account.
(iii) Receipt and Payment Account is a _________ account.
(iv) Income & Expenditure Account is a _________ account.
(v) Income & Expenditure Account is prepared on ______ basis of accounting.
(vi) Prize fund investments are shown on the ___ side of the Balance Sheet.
(vii) Receipt of legacy should be treated as a _________ receipt.
(viii) Interest on the General Fund Investments is credited to ________.
(ix) Subscription received in advance is shown in the ______ .
(x) Subscription received for Governor’s Party should be taken in the ________.
(xi) Deficit in Income & Expenditure Account is deducted from ______ .
(xii) Subscription of a non-profit making organization is collected regularly from its _____.
(xiii) Subscription received in advance relate to _________ year.
(xiv) Entrance fee collected from members every year is treated as _______ receipt.
(xv) Large amount of donations are added to ______ kind.
(xvi) A gift received as per the will of a deceased person is known as _______ .
(xvii) The difference of two sides of opening balance sheet represents ______.
Answer: (i) capital, (ii) Debited, (iii) Real A/c, (iv) Nominal, (v) Accrual, (vi) Assets, (vii)
Capital, (viii) Income & Expenditure Account, (ix) Balance Sheet, (x) Balance Sheet, (xi)
Capital Fund, (xii) Members, (xiii) Future, (xiv) Revenue, (xv) Capital Fund, (xvi) Legacy,
(xvii) Capital fund.
Correct the underlined portion of the following sentences
(i) Special donation is a revenue receipt. [CHSE-2016]

(ii) The balance of Income & Expenditure Account is transferred to the capital Account.
[CHSE-2014]
(iii) Income & Expenditure Account shows net profit or loss. [CHSE-2013]
(iv) Stock register denotes a record of all members or all subscribers of the organisation.
(v) Minute Book helps in knowing assets purchased, consumed and its present balance.
(vi) Receipt is a revenue item considered for finding surplus or deficit of the non-profit
organisation.
(vii) The excess of assets over liabilities termed as General Donation.
(viii) Any donation received for a specific purpose is an obligation (liability) of the
organisation to use it for the purpose for which it has been paid by the donor is known as
General Donation.
(ix) Life membership Fee is a non-recurring item and should, therefore, be taken on the assets
side of the Balance Sheet.
(x) Life Membership Fee is the amount received by the concern as per the ‘will’ of a
deceased person.
(xi) Income and Expenditure is a real account which records all receipts and payments (both
cash and cheques) during an accounting period.
(xii) Any amount paid by members to continue membership is known as Entrance Fees.
(xiii) A non-expendable fund which provides a permanent source of income is termed as
capital fund.
(xiv) Excess of Income over expenditure is known as deficit.
(xv) Financial assistance received from the Government and other institutions is termed as
donation by government.
Answers: (i) Capital receipts, (ii) Capital Fund, (iii) Surplus/Deficit, (iv) Members register,
(v) Stock register, (vi) Income, (vii) Capital Fund, (viii) Specific Donation, (ix) Liabilities
side, (x) Legacy, (xi) Receipt and Payment Account, (xii) Subscription, (xiii) Endowment
fund, (xiv) Surplus, (xv) Aids
Answer the following questions within one sentence each:
(i) Where is the balance of Income and Expenditure Account transferred? [CHSE-2016]
(ii) Define non-profit making organisation.
(iii) Define Donation.
(iv) What is non-cash expense?
(v) Define Honorarium.
(vi) Which basis of accounting is adopted by a non-profit organisation?
(vii) What is Legacy?
(viii) What is Life Membership?
(ix) Which type of donations is treated as revenue income?
(x) What type of donations is added to capital fund?
(xi) Define Endowment Fund.
Answer the following questions within one word:
(i) In which side of the Balance Sheet outstanding subscription is shown? [CHSE-2013]
(ii) The amount received as per will of a deceased person by a non-profit making
organization is
(iii) The surplus of assets over liabilities at the opening date is termed as
(iv) The amount contributed by the well-wishers of the organisation is term as
(v) A token of payment made to the persons who have rendered voluntary service to the
organisation is considered as
(vi) Fund denotes a type of fund which provides permanent income to the organisation is
known as
(vii) When loan is given to the members, a ledger account is maintained which is termed as
(viii) Any amount paid by members to continue membership is known as
(ix) The difference of assets over liabilities on opening, date is known as
(x) Financial assistance received from the Government and other institutions is termed as
(xi) Account which is prepared to ascertain bar profit or restaurant profit
(xii) Books of record which records the proceeding of general body meeting or Board meeting
is called
(xiii) Admission fee paid by the members is termed as
(xiv) The expenses which are charged to profit and loss or Income and Expenditure account
but not paid in the form of cash are known as
Answer: (i) Assets Side, (ii) Legacy, (iii). Capital Fund, (iv). Donation, (v) Honorarium, (vi).
Endowment Fund, (vii) Loan Fund, (viii) Subscription, (ix) General Fund, (x). Aids, (xi)
Bar Trading Account, (xii) Minute Book, (xiii). Entrance Fees, (xiv) Non-cash Expenses.
GROUP - B
(Very Short Answer Type)
Answer the following questions within 30 words (for 2 Marks)
1. How is “Outstanding subscription” treated in the final accounts of “not for profit
organization”? [CHSE – 2016]
2. What do you mean by Entrance Fee? [CHSE – 2016]
3. How is Life Membership fee treated in Accounts? [CHSE – 2016]
4. How is Life Membership fee treated in the Accounts of ‘non for profit’ concerns?
[CHSE – 2015]
5. What do you mean by specific donation? [CHSE – 2014]
6. What is entrance fee? [CHSE – 2014]
7. What is capital fund? [CHSE – 2013,2009]
8. How is life membership fee treated in Accounts? [CHSE – 2013]
9. What is specific donation? [CHSE – 2013,2010]
10. Define membership subscription. [CHSE – 2012]
11. What is special donation? [CHSE – 2012]
12. What does the Income and Expenditure Account reveal? [CHSE – 2012]
13. What is meant by legacy? [CHSE – 2011]
14. Define the concept of entrance fee. [CHSE – 2011]
15. Define Income & Expenditure Account. [CHSE – 2010]
16. Give any two examples of ‘non-profit making organizations’. [CHSE – 2009,2008]
(Short Answer Type)
Answer the following questions within 50 words (for 3 Marks)
(a) Write any three differences between Receipts and Payments Account and Income and
Expenditure Account. [CHSE – 2016]
(b) What are the elements of Final Accounts of a ‘Not for Profit’ Concern? [CHSE – 2015]
(c) What is Receipts & Payments Account? [CHSE – 2009,2008]
(d) What is Legacy?
(e) What is the treatment of general donations?
(f) How will you treat special donations?
(g) What is honorarium?
(h) Differentiate Receipt and Income.
(i) Differentiate Expenditure and Payment.
(j) Give five features of Receipts and Payment Account.
(k) What treatment will you give for entrance fees?
(l) How will you deal with subscription while preparing 'Income and Expenditure Account?
(m)Explain briefly the procedure of preparing income and expenditure account.
(n) Define Legacy. State its treatment in Income and Expenditure Account.
(o) State the accounting treatment of special fund while preventing financial statements of a non-
profit organisation.
(p) Mention various steps involved while preparing a receipt and payment account.
(q) Distinguish between profit making and non-profit making concerns.
(r) Differentiate between Income and Expenditure Account and Profit and Loss Account.
GROUP – C
(Long Answer Type)
Answer the following questions
1. Explain the procedure for preparation of Income and Expenditure Account from the given
receipts and Payments Account and other information. [CHSE – 2016,2014]
2. Distinguish between Receipts and Payments Account; and Income and Expenditure Account.
[CHSE – 2015]
3. Distinguish between Receipts and Payments Account and Income & Expenditure Account.
Describe the steps to be followed to prepare an income and expenditure account from a given
Receipts & Payments Account and additional information. [CHSE – 2012,2009,2008]
4. What is Receipts and Payments Account? What organizations prepare it? What purpose is
served by preparing it?
5. Explain the treatment of following items in preparing final account of a non-profit making
organisation
(a) Legacy
(b) Life Member Fees
(c) Donation
6. Explain the treatment of following items in preparing final account of a non-profit making
organization.
(a) Entrance Fees
(b) Capital Fund
(c) Subscription
(d) Sale of fixed asset.
7. Explain the procedure involved while preparing Income and Expenditure Account and
Balance Sheet from a Receipts and payment Account.
PRACTICAL PROBLEMS
Treatment of Subscription
1. Show subscription income for the year ended 31.3.2017
Subscriptions received during the year Rs 1,20,000

Subscription outstanding opening Rs 15,000
Subscription outstanding closing Rs 10,000
Answer:
2. Find out the amount to be credited to Income and Expenditure Account for the year ended
31.3.2017
01-04-2016 31-03-2017
Subscription outstanding opening Rs 10,000 Rs 8,000
Subscription received in advance Rs 13,000 Rs 7,000
Answer:
3. Prepare Subscription Account for the year 2017.

01-04-2016 31-03-2017
Subscription outstanding opening Rs 8,530 Rs 6,150
Subscription received in advance Nil Rs 4,780
Answer:
4. Find out income from the following information:
In a club there are 500 members, each paying fees Rs.270 p.a. Club has received Rs. 1,07,000 for
the year.
Answer: Rs 1,35,000
Treatment of Expenses
5. Calculate actual expenses chargeable to Income and Expenditure Account for the year ended
31-3-17.
Rs
Actual Expenses paid 40,000
Prepaid Expenses 01-04-2016 5,000
Ans. Rs.42,000
6. Find out the expenses to be charged to Income & Expenditure Account for the year ended 31-
3-17.
Rs
Actual Expenses paid 40,000
Opening outstanding Expenses 1,200
Closing outstanding Expenses 1,600
Answer: Rs 42,400
Calculation of Stationery & Material Consumed
7. From the following information, calculate the amount of stationary consumed to be shown
on the debit side of the Income & Expenditure Account for the year ending 31 st March 2017.
Rs
Advance paid for stationary on 31 st March 2016 1,800
Advance paid for stationery on 31st March 2017 600
Answer: Stationery Purchased Rs 16,400 and Stationery Consumed Rs 24,400
8. Calculate the amount of stationery consumed during the calendar year 2016.
Rs
Stock of stationery as on January 1, 2016 6,000
Creditors for stationery on January 1, 2016 2,000
Advance paid for stationery on 1st January 2016 200
Amount paid for stationery during the year 15,000
Stock of stationery on December 31, 2016 1,000
Creditors for stationery for December 31, 2016 1,500
Advance paid for stationery on December 31, 2016 1,300
Answer: Amount of Stationery Consumed Rs 18,400.
9. Treat the following items during the preparation of the Income & Expenditure Account for
the year ending 31st December 2016 in respect of Ram Rahim Club.
Particulars 31-03-2016 31-03-2017

Outstanding Interest 15,000 20,000
Interest received in advance 1,000 7,000
Interest received during the year 2016-17 Rs 1,45,000.
[Interest income to be shown in Income & Expenditure Account is Rs 1,44,000]
10. Treat the following items during the preparation of the Income & Expenditure Account for
the year ending 31st December 2016.
Particulars 31-03-2016 31-03-2017

Outstanding Rent 10,850 5,850
Prepaid Rent 1,500 2,150
Rent paid during the year 2016-17 amounted Rs 60,000.
Answer:
11. From the following information extracted from the books of Lalbahadur Society, calculate
the amount of depreciation to be charged to Income and Expenditure Account for 31-3-17.
01-4-16 31-03-17
Machinery Rs.12,800 Rs.23,750
Purchase of machinery during the year Rs.14,000. Sale of furniture during the year Rs.2,300.
Answer:
12. How will you deal with the following information at the time of preparing financial
statements of Eleven Star Club for the year ended 31-3-17.
Prize Fund 1-4-2016 1,70,000

Prizes awarded 45,000
Donations for prizes received 20,000
Answer:
13. How would you treat the following items of AGA Heritage Club while preparing the final
accounts as on 31st March, 2017?
Debit Balance Credit Balance
Sports Fund 80,000

Sports Fund Investments 80,000
Interest on Sports and Fund Investments 6,200
Sports Expenses 3,000
Sports Fees Collected 1,000
Answer:
14. Prepare an Income & Expenditure Account from the following information extracted from
Shridi Sai Trust, Ganjam for the year ended 31st March, 2017.

Receipts Rs. Payment Rs.

To Balance b/d 2,300 By Machinery 6,800
To Subscriptions 20,000 By Equipments 9,200
To Donations 9,850 By Investment 4,500
To Entrance Fees 2,150 By Salaries 2,050
To Sale of old news paper 1,500 By Telephone Charges 3,280
To Hall Rent Received 2,200 By Printing & Stationery 4,250
38,000 38,000
Additional Information
(e) Outstanding subscription as on 31-03-2017 amounted to Rs 3,240.

(f) Outstanding salary Rs 650.
(g) 40% of Entrance Fees are to be capitalized.
(h) Depreciation is charged @ 10% p.a. on Machinery.
Answer:
15. From the following Receipts and Payments Account of Youth Dramatic Club, Puri, Prepare
the Income and Expenditure Account for the year 31st March, 2017.


To Donations 12,000 By Printing & Stationery 3,450
To Interest on Investment 1,000 By Repair 3,150
To Entrance Fees 4,200 By Billiard Table 5,750
To Interest from Banks 1,100 By Investment 6,250
To Sale of old Newspaper 1,200 By Miscellaneous Exp. 2,600
By Furniture 8,870
By Insurance 2,330
46,000 46,000
Adjustments-
a. Subscriptions in Arrears for the year ended 31st March, 2017 are Rs 8,000 and
Subscription in Advance for the year ended 31st March, 2017, Rs 2,000.
b. Prepaid Insurance amounted to Rs 1,400.
c. Miscellaneous Expenses outstanding Rs 650.
d. 40% of Donation is to be capitalized.
Preparation of Income & Expenditure Account and Balance Sheet
16. From the following Receipts and Payments Account of Mission Shakti charitable society
Prepare the Income and Expenditure Account for the year ended 31st December, 2016 and the
Balance Sheet as on that date:


To Subscriptions By Salaries 8,920
2015 3,000 By Electricity Charges 3,180
2016 11,000 By General Expenses 2,800
2017 3,000 17,000 By Books 10,000
By Insurance 3,635
To Rent Received 5,000 By Postage 1,200
To Profit from Entertainment 2,800 By Balance c/d 2,265
To Sales of Grass 2,700
32,000 32,000
1. The club has 75 members each paying an annual subscription of Rs 200. Subscriptions
outstanding on 31st December 2015 were to the value of Rs 3,940.
2. On 31st December, 2016 Salaries Outstanding amounted to Rs 1,100 and Rs 2,360 on 31st
December, 2015.
3. On 1st January, 2016, the club owned building valued at Rs 90,000, Furniture worth Rs
20,000 and Books Rs 25,000.
Answer:
17. From the following Receipts and Payments Account of the Chetna Charitable Trust for the
year ending March 31, 2007, prepare an Income and Expenditure Account and a Balance
Sheet.

To Subscription: By Misc. Expenses 1,300
2014-15 400 By Postage and Printing 1,000
2015-16 20,000 By Drama Expenses 5,000
2016-17 600 By Newspapers 1,600
To Donations 3,800 By Scholarships 6,500
To Sale of Waste Papers 600 By Literacy Seminar 4,000
To Sale of Drama Tickets 8,200 By Library Books 8,000
By Electricity Charges 3,000
By Rent 2,000
By Bank Deposits 3,000
43,600 43,600
(i) Society has 300 members, each paying Rs. 80 per annum, Rs.700 subscription arrear
for 2014-15.
(ii) Rent due at the end of the year is Rs. 600.
(iii) Salary Rs.2,240 is still payable for 2015-16 Salary for 2014-15 was in arrear
Rs.1,020.
18. The following informations are extracted from the Receipts and Payments Account of
Upasana Educational Trust for the year ended 31-3-16. You are required to prepare Income
& Expenditure Account using the additional information.


To Subscription: By Furniture 7,000
31-3-15 6,000 By Printing & Stationery 2,500
31-3-16 28,000 By Equipments 10,000
31-3-17 2,000 36,000 By Telephone charges 5,000
To Sale of old news papers 1,000 By Salaries 6,000
To Sale of grass 2,135 By Travelling 2,300
To Interest on Bank Deposits 1,365 By Newspapers 1,900
43,700 43,700
1. Salaries outstanding Rs.1,200 on 31-3-16

2. Rent outstanding Rs.1,300 on 31-3-16
3. Depreciation charged on equipments @ 10% p.a.
5. Subscription due 31-3-16 Rs.3,000.
19. Following is the receipts and payments account of an NGO, ‘NISWAS’, Koraput for
the year ending 31st March, 2017.


To Interest on investments 4,000 By Postage 4,900
To Entrance Fees 10,000 By Rent 8,450
To sale of grass 1,200 By Telephone charges 7,250
By Printing and stationery 4,900
By Furniture 12,000
66,000 66,000
Additional information:
1. Salaries outstanding Rs.2,450.

2. Rent due Rs.1,250.
3. Subscriptions to be received for the year 2016-17 is Rs.6,000.
4. Depreciation on furniture 10%.
5. Capital fund in the beginning amounted to Rs 25,000.
6. At the beginning of the year, the balance of Books was Rs 18,000 and Equipments Rs
7,000.
Prepare income and expenditure account for the year ended March, 2017 and Balance
Sheet as on that date.
20. Following is the summery of cash transactions of Marigold Society for the year ended 31st
March 2017. Prepare the Income and Expenditure Account for the year ended 31 st March,
2017 and also the Balance Sheet on that date.


To Entrance Fees 10,000 By Rent and Taxes 9,000
To Subscriptions 23,000 By Electricity Charges 5,000
To Donations 12,000 By General Expenses 2,120
To Interest 2,480 By Telephone Charges 3,000
To Profit from Entertainment 3,620 By Office Expenses 5,100
55,100 55,100
Additional Informations
i) In the beginning of the year, the club had Books worth Rs 25,000 and Furniture worth Rs
12,000.
ii) Subscriptions in Arrears on 1st April 2016 were Rs 1,240 and Rs 1,760 on 31st March
2017.
iii) Rent due at the end of the year amounted to Rs 600.
iv) Depreciation charged 10% on furniture and 10% on books.
v) On 31st March 2017, Salaries Rs 1,000 and Electricity charges Rs 450 were outstanding.
21. Following is the Receipts and Payments Account of the Netaji Club, Cuttack for the
year 31st December, 2016.


To By
Bank Balance 10,200 Rent and Taxes 5,160
Subscriptions 31,000 Printing & Stationery 2,220
Bank Interest 400 Postage 2,780
Sale of grass 1,000 Furniture 10,500
Investments 8,000
Bank Balance 8,300
46,400 46,400
Investments were purchased on 1st July 2016 and yielded interest @ 5% p.a. Subscriptions
included Rs 6,000 for 2015 and Rs 2,000 for 2017. Subscriptions for 2016 still in arrears were Rs
5,000. Rent for December 2016 Rs 400 is still unpaid.
Prepare the Income & Expenditure Account for the year ended 31 st December, 2016 and the
Balance Sheet as at that date.
22. Following is the Receipts and Payments Account of an NGO ‘PURBASHA’ for the year
ended 31st December, 2016.


To By
Entrance Fees 800 Postage 4,100
Subscriptions Furniture 1,450
2014-15 400 Investment 3,000
2015-16 17,600 Printing and Stationery 890
2016-17 200 18,200 Miscellaneous Expenses 1,420
Income from Entertainment 300 Bank Balance 3,100
Interest on Securities 450 By Balance c/d 1,090
22,250 22,250
Prepare the Income and Expenditure Account of the club for the year ended 31 st December, 2016
and the balance Sheet as at that date having due regard to the following additional information:
1. The club has 1,900 members, each paying an annual subscription of Rs 10. Subscriptions
amounted to Rs 100 are in arrears in respect of the year 2015.
2. Stock of Stationary on 31 st December, 2015 was Rs 140 and on 31st December, 2016 Rs 100.
3. Salary of Rs 500 for December 2016 is outstanding. Expenses accruing on 31 st December,
2015, amounted to Rs 120. The club paid Rs 200 in the year 2015 towards Telephone
Charges of which Rs 80 relate to 2016.
4. As on 31st December, 2015 Premises stand in the books at Rs 25,000 and Investments at Rs
6,800. Depreciate Premises and Furnitures by 10% p.a.

Chapter - 04 Financial Statement For Non Profit Making Organization

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Chapter - 04 Financial Statement For Non Profit Making Organization

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Chapter- 4

Financial Statements of Not-for-Profit Organization

 Describe the meaning of a non-profit making organization

Characteristics / Features of Non-profit Concerns

Absence of Profit Motive

These concerns are regulated and managed by elected representatives of members.

Objective of Non-profit making organization

The main objectives of a non-profit making concern are as follows:

1. To provide quality services to its members as well as the society.

Difference between Profit making Concern and Non-profit making concern

Points Profit Making Concerns Non-profit making Concerns

A non-profit organization represents a type of organisation established with the objective of

(1) Members Register:

(2) Minutes Book:

(3) Stock Register:

Financial Statements of Not-for-profit Organizations

1. Receipts and Payments Account;

Receipts and Payments Account

Features of Receipts and Payments Account

Specimen of a Receipts and Payments Account

SPECIMEN RECEIPTS & PAYMENT ACCONT

Capital Receipts : Capital Payments:

To Legacies By Library Books

Distinction between Cash Book and Receipts and Payments Account

Points Cash Book Receipts & Payments Account

Cash Bank Cash Bank

Feb. 1 To Balance b/d 9,000 35,000 14 By Printing & 2,000

Receipts Rs. Payments Rs.

RECEIPT AND PAYMENT ACCOUNT

Dr. FOR THE YEAR ENDED 31ST. DECEMBER 2016 Cr.

Receipts Rs. Payments Rs.

IILLUSTRATION - 2 (Preparation of Receipts and Payment Account)

RECEIPTS AND PAYMENT ACCOUNT OF NARAYANI CLUB

To Subscription By Books &Newspaper 1,500 2,500

To Donation received 5,000 By Purchase of sports equipments12 2,000

Income & Expenditure Account

Features of Income & Expenditure Account

The main features of an Income and Expenditure Account is described below:

SPECIMEN INCOME AND EXPENDITURE ACCOUNT

Basis of Difference Income & Expenditure

SL. Basis of Profit & Loss Account

2. Purpose  It is prepared with the intention to  It is prepared with an objective

5. Sources of  The major sources of income in  The major source of income in

SPECIMEN OF BALANCE SHEET

TREATMENT OF SOME IMPORTANT ITEMS

Subscription refers to a periodical contribution of a fixed amount by the members of a club or a

Treatment of Subscription is made as follows:

CALCULATION OF SUBSCRIPTION TO BE SHOWN IN INCOME & EXP. ACCOUNT

Dr. SUBSCRIPTION ACCOUNT Cr.

By Subscription received in advance

S1= SR + OS2 + AS1 - OS1- AS2

a. Ignore the opening and closing cash and bank balances.

Subscription received during 2016 40,000

Add: subscription due at the end 12,000

Case -1: If subscription outstanding for 31-3-2017 is Rs 25,000

Particulars Amount Particulars Amount

Particulars Amount Particulars Amount

Income & Expenditure Account

Particulars Amount Particulars Amount

Particulars Amount Particulars Amount

Subscriptions received in advance 6,500

Outstanding Subscription Rs 40,000 Rs 50,000

Subscriptions received in advance Rs 3,000 Rs 4,000