Chapter 17

Accounting for
Co-operative Societies
 FEATURES OF A CO-
OPERATIVE
The owners of a business in this
nature are called members.
These members agreed collectively
to pay sums of money for shares.
All co-operatives use a combination
of features from non profit
organizations, Partnership Companies
and Limited Liability Companies.
 SOURCES OF CAPITAL

The sources of capital for co-

operatives are from the members
who apart from purchasing shares
may also purchase goods and
services.
To record the issue of shares, the
entries in the General Journal will be:
Dr. Bank/Cash
Cr. Share Capital a/c
 Financial Statements
At the end of every financial year, co-
operatives are expected to prepare:
Receipts and Payments account
Cash Flow statement
Trading and Profit and Loss Account
(Income and Expenditure
account/Income statement)
Appropriation account
Balance sheet.
 TRADING AND PROFIT
AND LOSS ACCOUNT
Information to prepare these statements
will come from the Receipts and Payments
a/c.
Revenues and expenses will be used to
prepare these statements which are
dependent on the particular activities of
the firm.
Included in these statements is
Honorarium which is the small amount co-
operatives paid to committee members.
 APPROPRIATION ACCOUNT
Information for this statement comes
from the Receipts and Payments a/c and
Income and Expenditure a/c.
The amounts to be transferred and
retained as reserves, funds or schemes
will be decided by the Board of
Directors.
The remainder of the surplus (after the
transfers) is available for distribution as
dividends.
 APPROPRIATION ACCOUNT
After the dividends are paid, the
undistributed remainder will be
carried forward to the next period as
undistributed surplus.
 BALANCE SHEET
Information for the Balance Sheet
will come from the Receipts and
Payments a/c and the Appropriation
a/c.
The format of the Balance Sheet
(Assets and Liabilities) will be the
same as other organisations.