Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
FEATURES OF FINAL ACCOUNTS OF NPO
2
FINAL ACCOUNTS OF NPO
FEATURES
RECEIPTS & PAYMENTS A/C
1. It is a REAL a/c (Traditional Approach) and ASSET a/c (Modern Approach).
2. It is prepared on CASH BASES OF ACCOUNTING.
3. It is prepared at the end of the accounting period.
4. It shows the Cash and Bank transactions for the accounting period.
5. It is prepared from CASH BOOK.
6. The purpose of preparing this account is to get a fair idea of amount received and paid under various heads during the year.
7. It begins with the opening balance of Cash/ Bank and ends with the closing balance of Cash/ Bank.
8. All receipts are shown in DEBIT side; whereas all payments are shown in CREDIT side.
9. Both CAPITAL & REVENUE items are recorded in this account.
10. Items recorded in this account may pertain to Current year/ Previous year or Subsequent year.
11. Adjustments for Accrued Income & Income received in advance and Outstanding Expense and Prepaid Expense are not made in this account.
12. Non cash expense like Depreciation is not recorded in this account.
RECEIPTS & PAYMENTS A/C
1. 1. It is a NOMINAL a/c (Traditional approach) and REVENUE/ EXPENSE a/c (Modern approach).
2. It is prepared on ACCRUAL BASES OF ACCOUNTING.
3. It is prepared at the end of the accounting period.
4. The object of preparing this account is to ascertain the Surplus or Deficit for the accounting period.
5. Expenses are shown on DEBIT side; whereas Incomes are shown on CREDIT side.
6. Only REVENUE items are shown in this account; all Capital items are excluded.
7. Only items relating to CURRENT year are shown in this account.
8. It does not have an opening balance; it ends with SURPLUS (excess of income over expenditure) or DEFICIT (excess of expenditure over income).
9. Such Surplus or Deficit is added or deducted from the Capital Fund respectively.
10. Adjustments for Accrued Income and Income received in advance and Outstanding Expense and Prepaid Expense are made in this account.
11. Non cash expense such as Depreciation is recorded in this account.
INCOME & EXPENDITURE A/C
BALANCE SHEET
1. The objective of preparing the Balance Sheet is to show the financial position of the organisation as at a particular point of time.
2. Method of preparing the Balance Sheet for a Not for profit organisation is the same as that of profit making organisation.
3. Balance sheet is prepared after Income and Expenditure a/c.
4. The difference between the assets and liabilities is referred to as CAPITAL FUND or GENERAL FUND.
5. The Surplus or Deficit is added or deducted from the Capital Fund as the case may be.
6. All Capital Receipts such as Life Membership Fees, Legacies etc are directly added to the Capital Fund.