Financial Statements of NPO Flashcards
Define Non-Profit Organizations.
It is set up to provide service to its members and the public in general.
Explain Entity as a feature of NPO
It has a separate legal entity than its owners and members.
Explain Purpose as a feature of NPO
Its purpose is to further cultural, professional, educational and religious objectives and give services to masses.
Explain Ownership as a feature of NPO
it is set up by individuals or companies as charitable trust but belongs to the society.
Explain Non-profit as a feature of NPO
It earns surplus, used to maintain assets and operations and for the objective it was set up for but not distribution amongst members.
Explain Management as a feature of NPO
Managed by a group of individuals called managing committee or trustees.
Explain Funds as a feature of NPO
Funds are given by the members or the donors in form of fees and donations and is credited to capital funds or general funds.
Explain Financial Statements as a feature of NPO
Prepares receipts and payments A/c, Income and expenditure A/c and balance sheet and gives it to statutory authority known as registrar of societies.
Define Receipts and payments A/c.
It is the summary of cash and bank receipts and payments during an accounting period.
Explain Nature as a feature of R and P A/c
It is asset A/c as it is a summary of cash and bank receipts and payments.
Explain Basis as a feature of R and P A/c
Prepared on cash basis of accounting i.e. transactions which are paid or received in cash are recorded.
Explain Capital and revenue as a feature of R and P A/c
It shows all capital and revenue receipts and payments
Explain period as a feature of R and P A/c
Shows transactions from current, previous and next accounting periods.
Explain balances as a feature of R and P A/c
opening and closing shows cash in hand and/or bank at beginning and end resp.
Explain Adjustments as a feature of R and P A/c
Adjustments are not made at it is cash basis accounting.
