NOT PROFIT ORGANISATION

NPO

Receipts and Payment| Income and Balance sheet

A/c Expenditure A/c

Resembles Cash Resembles Profit and

Book Loss A/c

Income and Expenditure Account

Receipts and Payments Account

1. Debit side is Receipts and Credit side | 1. Debit side is Expenses/Losses and
is Payments. Credit side is Income/Gain.

Records all cash receipts and cash

2. Records only Revenue Receipts
payments on debit side and credit side
and Payments.
irrespectively whether its capital or revenue.

3. It may be for current year, previous

*3. It is only for the current year.
year and next year.

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 PRACTICE
OF
FACCOUN
UNTING
ACCO

AND
TPLES
PRINCIP

the y e a r
ended
. . .

Cr
Dr. Receipts y m e n t s
Account

Amount
for

Payments
(Opening
Amount
Receipts Balance
b/d
Xxx
By case
of
Overdraft)

To Balance
b/d(Opening Balance):
Balance)in

B yS a l a r i e s
Xxx
Cash in Hand XXX
By Rent
Xxx
Cash at Bank XXX
B y Postage Expenses Xxx
To Subscriptions: By Newspapers and
XXX
Magazines, etc.
For Previous Year xXX
XXX
By Repairs
For Current Year XXX ByAudit Fee XXX
For Next Year xXx XXX B y Maintenance Expenses

To General Donations XXX XXX

B y Insurance
To Entrance/Admission Fees XXX By Secretary's Honorarium
XXX
ToGeneral Grants XXX
B y Honorarium
XXX
To Sale of Newspaper, Grass, etc. XXX
XXX
By Municipal Tax
To Sale of Old Used Sports XXX
By Office Expenses XXX
Materials XXX
XXX
B yPrizeDistributed
To Interest on Investments XXX

on Show XXX
To Income from Concerts/Lectures XXX By Expenses
Payments XXX
To Dividends XXX By Miscellaneous
Fixed Assets
By Purchase of XXX
To Rent Received XXX
(e.g.,(e.g., Furniture)
XXX By Sports Equipment XXX
To Interest Received
By Investments XXX
To Miscellaneous Receipts XXX

By Books XXX
To Life Membership Fees XXX
To Subscriptions for Specific XXX By Loan (Repayment)
Purpose
To Donation for Specific Purpose XXX ByBuilding XXX

By Balance c/d
XXX XXX
ToLegacies (Closing Balance):
ToEndowment Fund XXX Cash in Hand XXX

To Sale of Fixed Assets XXX Cash at Bank* XXX

To Receipts on Account of Special

XXX
Fund, i.e., Match Fund, Prize Fund,

Balance c/d (Bank Overdraft)*

XXX
To
XXX XXX

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 A
ORGANISATION
r NOT PROFIT

Income and Expenditure Account

Income and
Expenditure
Account

Points to be
Noted

Records It is for current

Revenue
year only
Transaction only

Transactions

Capital Revenue

Receipts/ Expenditure Receipts/Expenditure

1. Non-Recurring in Nature 1. Recurring in Nature

2. More one year 2. Within one year

Special Terms:
1. Entrance Fees
a. Fees collected when new member is admitted
b. It is non- recurring in nature
C. It is a Capital Receipts
2. Donations
a. Collected for some purpose or not some purpose
b. If it is collected for some purpose then it is Capital Receipts
c. If it is not collected for some purpose then it is Revenue Receipts
3. Endowments
a. Donations are also in the form of endowments.
b. It is a Capital Receipts

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 PRINCIPLES AND
PRACTICE
COUNTIN
OF ACCOUNT
PRINC
4. Subscriptions
a. These are annual receipts received. 011 the accrual basis.
lls Is treated as Revenue Receipts bascu
5. Life
Membership Fees
Fees received for membership
a.

b. It is
Capital Receipts
6. Legacy
of certaim persons by
d Many times trusts are formed in the memory
their will.
the funds pass on to the
Such case after the demise of the person,
institution.
CDince it is one time received by the company it iS Capital Receipts
7. Proceeds from Sale of Old Assets
8. Sale of Old
Newspapers
9. Honorarium
Calculation of Subscriptions
Subscription as per Receipts and Payment Account XXx
Add: Subscription received in Advance at the year beginning XXX

Subscription Outstanding at the year-end XXX

XXX

Less: Subscription received in Advance at the year-end (XXx)

Subseription Outstanding at the year beginning (Xxx)
Subscription to be credited to Income and Expenditure Account XXX

Cost of Goods Consumed

Goods Consumed During the Year Amount

Opening Stock of Consumable Items XXX

Add: Purchases during the year XXX

Less: Closing Stock

(XXx)
Balance to be shown in the lncome and Expenditure A/c XXXX

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 NOT PROFIT ORGANISATION
Income and
Expenditure Account for the period ended..
Dr.

Cr.
Expenditure Amount
To Salaries Income Amount
XXX
ToRent By Subscriptions XXX
XXX
To Insurance Premium By Entrance Fees XXX

To Audit Fees
XXX
ByDonations XXX
XXX
To Printing and Stationery By Sale of Old Newspapers XXX
XXX By Hall Rent XXX
ToHonorarium
XXX
By Sundry Receipts XXX

By Deficit (excess of
To Telephone Expenses XXX
XXX
expenditure over income)
ToRepairs XXX
To Depreciation
XXX
To Sports Material Used XXX
To Surplus (excess of income
over expenditure) XXX

XXXX
XXXX
Balance Sheet

Treatment of Special Items in Balance Sheet

Donation-Specific Liabilities Side

Entrance fees Added to Capital

Fund
Legacy Added to Capital
Fund
Balance
Sheet Life Membership Liabilities Side
Fees

Endowments Liabilities Side

Outstanding
Subscription- AssetAsset side
Current year

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 1 INCIPLES AND
PRACTICE
CCOUNTING
OF ACC

Preparation of Income
nd and Expenditure Account and Balance Sheet from
ccepTS and
Payment Account with additional inforla tion
Step 1: Determine Opening Capital Fund
Opening Balance Sheet as at...
Liabilities Amount Assets Amount
Bank Overdraft, if any Cash in Hand

Outstanding Expenses Cash at Bank

Advance Subscription Fixed Assets, if any

Capital Fund* (balancing Investments, if any

figure) Outstanding Subscriptions

Prepaid Expenses

Step 2: Identify Incomes from Receipts and Payments Account

Step 3: Identify Expenses from Receipts and Payments Account

Step 4: Identify the
items not in Receipts and
Payments Account but are to be
shown in the Income and Expenditure Account

Step 5: Compute Surplus or Deficit in ncome and

Expenditure Account
Step 6: Preparation of Closing Balance Sheet

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94
 NOT PROFIT ORGANISATION

Balance sheet as at
Liabilities
Rs. Assets Rs.
Capital Fund or General Fund or
Fund:
Corpus Fixed Assets:
Opening Balance Building:
XXX XXX Opening Balance taxXX
Add: Surplus (or Less: Deficit) XXX
XXX Add: Additions XXX

Building Fund:
Less: Depreciation (KXK)
Opening Balance
XXX XXX Furniture
Add: Donation for Building XXX Opening Balance XXX XXX

Income from Building Fund Add: Additions XXX

xxx
Less: Depreciation (XXx)
Investment Sports Fund: XXX Less: Sale Xxx) XXX

Opening Balance XXX

XXX

Add: Donation for Sports Fund XXx

Current Assets: XXX

Income on Sports Fund Cash in Hand XXX

XXX
Investment Cash at Bank
Less: Sports Prize Awarded XXX Subscriptions in Arrear Accrued
XXX)
XXX
Interest
XXX XXX
Current Liabilities:
XXX
Investments: XXX
Outstanding Expenses:
Rent Building Fund Investments Sport
Salaries Fund Investments
XXX
Electricity/Water Charges Subscriptions
Received in Advance Prepaid Expenses: XXX
Insurance
Rent

PROBLEMS:

CALCULATION OF SUBSCRIPTION AMOUNT:

1.From the following information, calculate the amount of subscriptions to be

credited to the income & expenditure account for the year 2007-2008:

PARTICULARS AMOUNT(Rs)
Subscriptions received during the year 50,000

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