Accounting Fon Not ~ Fon. [hogil Organisations ; i Meaning » rion -tnading concenng om nol -{on profil organisations — Ane concent which donot undentake trading, but nenden —ltisand " , a foual services, Bach ax Khe promotion af ant, culbune Paw received Wout of may Llorotune, sponts serdemtainme nk, education, Bdence, Chasity » nekigion ete, to their me cokes and Phe genurad {lacured public. 8 fterns in Ex amples fon Non —For- Preys organizations: toa surg — ~ Pewapape: Liteomny societies , Libsasies, Celucational “Trahtudions, — otane Hospitals, religious institutions, Chanitable jogbtudtions, Stow Recoeation clubs, Albhe he and sponts clubs ete const Characteniahe Featunes af Non-Trading Concenns: Yeon by _ Sacer arenes oreemern . and pe TJ Set ap gon pnovieling genvices to 18 members and the public jor the promotion of ant, cutluse ,educadion ele. Tion by Z]Mmey doovk Undesitatve tarading and Manujaturing Uecting activites nto 3) Thein tnangadiong ane mostly cash Lsansationg, varchs Normally Hey do nok have credit transactions. aad 4] They Prepare focome and expendihune Accounk, ko kndw guorphus on deficit. ot 5} AL Une end q each acwounting yeas, Enty ase nequined / fo eubsmit ther Jinanual Sodemends Like Receipt = and payment accounk, Intome and Expendi tune atcoune Rue and Balance Sheek bo Ene Blotubony aukhonibs Ge iy Registaon 9 Soucis. J Thelm afaing ome usually managed by managin men sie elected by rember. The dutavdbow ‘ nok ownes just they are me mbens. 4) Sunplas clo ot alistpibuted Ha fp ta members bod Coedited to fund called capital und. ‘Scanned with CaseannerDijorencer baween Pray ond Nok- for Cregil orgenisa bent Brat onganizabens Non Frogit Organizations OD Formed pn trading ackvik4 Dtonmned fon the prpor? : dike buying rel ‘naling Rendeningy Serwices ' ® Both cath and cudit tract @ Most the trancachions hers equally important ane “cath teansatior8 ® Maintain many aubsidiany @ Maintain enly cash book and founnd books @ The final acourds gg 2% & the ginal aceounk® ef Covad k trading conunn comia =} receipt and payment ay 9g tracking and Pét Ale aiciounk, Enleme and Exper and Balance Sheek ~bune Ale and Balance sheet. an case qa trading Conus (S) The excess tke aasels Une excess 4 ausck® oven ever ite Viagibahke a1 ag 18 Ciabilibu on any dake date it cathed capites fund. % cetled capital Books 4 Accourds Maintained by Non-Trodiag Conusns , D cash book: Th mneconds all cagh receipt and payments AJ Ledger: Tt containg accounts ef alt j a} Med ares, and fewibates! aoe es heed 3) Stock Registes: It keeps necond vf aat yixed asxads and the undumables Baal Accourds 4 Non- Tracking [Wolfen Profit caganisakons: D Reuspl and Payment: &ecoudl- _¥ YJ Tntome and Expendi bane Account 3} Balance Sheek. ‘Scanned with CaseannerNote on Capital and Revenue Items J Revenue Receipts are recurring (i.e, regular) receipts and are generally received at least once in a year, €.£.. receipts from sale of goods, subscriptions received etc. They are to be recorded on the income side (credit side) d ‘of Income and Expenditure Account and (or Profit and Loss Account) Revenue expenditure are recurring (i.c., regular) expenditure and are generally paid at least once in a year, eg. salary paid, rent paid, electricity charges paid etc. They are to be recorded on the expenditure side (@ebit side) of Income and Expenditure Account (or Profit and Loss Account) Capital expenditure are non-recurring (i.c., not regular) expenditure and are incurred in irregular intervals of more than one year, say, once in 5 years, or 10 years etc. e.g., expenditure on building purchased, expenditure ‘on machinery purchased etc. Generally these items will appear on the assets side of the Balance sheet Capital receipts are non-recurring (i.c., not regular) receipts and are received in irregular intervals of more - than one year, say, once in 5 years, once in 8 years or once in 10 years and so on. ¢.g., Amount of capital feceived, long term loan borrowed, amount received by the sale of fixed assets, (say, buildings), legacies received, life membership fee received etc. These items will go to Balance sheet (generally to the liabilities ‘side; but items like sale of fixed assets will be adjusted on the assets side). ‘Scanned with Caseannera, “Examples of Capital and Revenue Items Revenue Receipts 2 Mag 16 State any (wo examples of revenue receipts. 19. Interest received Interest on investment Rent received Sale of old newspapers Sale of old sports materials Sale of goods Government grant for maintenance Subscriptions (or subscriptions received from members) anne Revenue Expenditure State any two examples of revenue expenditure. 2M Subscription to newspapers and magazines Interest Rent Salary Honorarium paid Amount spent for upkeep of ground Depreciation on machinery (or Depreciation on other fixed assets) ZY Awe oKe (Write any two items ~2weune IIL. Capital Expenditure 2M 20. a /, Capital Receipts |. Write any two examples of capital receipts. . Legacies Life membership fees Give any two examples of Capital expenditure. 1. Cost of machinery purchased Carriage paid on assets (such as machinery, furniture) purchased Computer purchased by a college X-ray plant purchased by a hospital 2. 3. Installation charges of new machinery 4 B (Write any two item 20 ‘Amount of capital received Long-term loan borrowed Sale proceeds of fixed assets (c.g, Sale of machinery, Sale of Furniture, Sale of buildings, Sale of mot Sale of sports equipment such as Billiards table, Tennis table) Special donations €.g.: (i) Donation received for constructing a swimming pool (ii) Donation received for building (iii) Donation received for pavilion ‘Scanned with Caseanner*Practical Oriented Questions (5 Marks each) 23. Classify the following into revenue and capital items (1) X-ray plant purchased by a hospital (2) Interest received (3) Sale of old sports materials (4) Carriage paid on goods purchased (5) Donation received for constructing a swimming pool Ans: (a) X-ray plant purchased by a hospital —» Capital expenditure (b) Interest received — Revenue receipt (©) Sale of old sports materials > Revenue receipt (d) Carriage paid on goods purchased —> Revenue expenditure (e) Donation received for constructing a swimming pool — Capital receipt 2A. Classify the following into capital and revenue items. (1) Honorarium paid. (2) Installation charges of new machinery (3) Subscription to newspapers (4) Cost of purchases of new machinery (5) Donation received for building Scanned with CamSeanneree SFSSFSFSSSSSSSSSSSSSeSeeesee Ans: (a) Honorarium paid — Revenue expenditure (b) Installation charges of new machinery -> Capital expenditure (©) Subscription to newspapers —> Revenue expenditure (4) Cost of purchases of new machinery -> Capital expenditure (©) Donation received for building -> Capital receipt 25, Classify the following into Capital and Revenue items. (1) Computer purchased by a college (2) Life membership fees 51 (3) Sale of machinery (4) Subscriptions received from members (5) Amount spent for upkeep of ground ruc March 201605) une? Ans: (@) Computer purchased by a college —> Capital expenditure (b) Life membership fees —> Capital Receipt (6) Sale of machinery > Capital Receipt (d) Subscriptions received from members —> Revenue Receipt (@) Amount spent for upkeep of ground —> Revenue expenditure 26. Classify the following into capital and revenue items: (1) Legacies (2) Subscriptions (3) Life membership fee (4) Special donations (5) Sale of old newspaper ILPUC June Ans: (a) Legacies -> Capital receipt (b) Subscriptions > Revenue receipt (©) Life membership fee —> Capital receipt (@) Special donations —> Capital receipt (© Sale of old newspaper > Revenue receipt 97. Classify the following into Capital and Revenue items. (1) Govt. grant for maintenance (2) Depreciation on Machinery (3) Subscriptions to newspapers (4) Rent received (5) Interest on investments ‘Scanned with CamcannerAns: (a) Govt. grant ~» Revenue Receipt (b) Depreciation on Machinery —> Revenue expenditure (©) Subscriptions to newspapers > Revenue expenditure (d) Rent received -» Revenue receipt (©) Interest on investments -> Revenue receipt 28. Classify the following into Revenue and Capital Items. ((QB)(P) 18 (Q) 1] 5 Marks (1) Legal charges incurred in connection with the purchase of land. (2) Brokerage paid for raising a loan for the purpose of business. (3) Amount spent on repair to a second hand motor car before It Is used. (4) Expenses incurred for white washing the old building. (5) Periodical repairs of plant. ‘Ans: (1) Legal charges incurred in connection with the purchase of land is Capital expenditure. (2) Brokerage paid for raising a loan for the purpose of business is a Capital expenditure. (3) Repair to a second hand motor car before itis used is a Capital expenditure. (4) Expenses incurred for white washing the old building is a Revenue expenditure. (5) Periodical repairs of plant is Revenue expenditure. 29. How do you treat the following items? (1) Life membership fees (2) Legacies received. (3) Prize amount received from a lottery (QB Page 18 Q 2) 5 Marks (4) Honorarium paid to the secretary. (5) Sales proceeds of old tennis bails. Ans: (1) Life membership fees received are Capital receipts, (2) Legacies received are Capital receipts. from a lottery is a Capital receipt. (4) Honorarium paid to the secretary is Revenue expenditure. (6) Sale proceeds of old tennis balls are Revenue receipts. 30, Classify the following i (1) Cost of installing lights and fans. (2) Special subscriptions received for special purpose. (3) Match expenses met out of match fund. (4) Prizes awarded to students on the college day. (6) Laboratory expenses incurred by the sclence department of a college. (3) Prize amount received tems into revenue and capital item: (QB Page 18 (Q) 3) 5M laa tt i i ‘Scanned with CaseannerAns: (1) Cost of installing lights and fans is Capital expenditure. (2) Special subscriptions received for special purpose are Capital receipts. ) Match expenses met out of match fund are Capital expenditure: (4) Prizes awarded to students on the college day are Revenue expenditure: (5) Laboratory expenses incurred by the science department ofa colleBe &7° Reven! 5Ma 31. Classy the following items into revenve and capital tern QB @) 18() ‘ (1) Honorarium paid to a surgeon by a hospital. (2) Subscriptions to newspaper and periodicals. (3) Installation charges of a new machinery. (4) Cost of construction of pavilion by a sports club. (5) Donation received for constructing a swimming pool. Ans: (1) Honorarium paid to a surgeon by a hospit: (2) Subscriptions to newspaper and periodicals are Revenue expenditure. (3) Installation charges of a new machinery are Capital expenditure. (4) Cost of construction of pavilion by a sports club is Capital expenditure. (5) Donation received for constructing a swimming pool is Capital receipts. 32. Classify the following items into revenue and capital item: [QB (P) 18 (Q) 5] 5 Ma (1) Carriage paid on goods purchased. (2) Salary paid to ground men for up keep of ground. (3) Sale of old sports materials. (4) Locker rent paid. () Interest on loan taken for construction of building al is Revenue expenditure. Ans (1) Carriage paid on goods purchased is Revenue expenditure, (2) Salary paid to ground men for up keep of ground is Revenue expenditure, (3) Sale of old sports materials is Revenue receipt. (4) Locker rent paid is Revenue expenditure. (5) Interest on loan taken for construction of building - Capital expenditure, [Note to students: In this book the term: (QB) Means question Bank given by Department of PU Education (P) Means page number (Q Means question number ‘Scanned with Caseanner