NCERT Class 12 Accountancy Accounting For Not for Profit Organisation

Read and download NCERT Class 12 Accountancy Accounting For Not for Profit Organisation in NCERT book for Class 12 Accountancy. You can download latest NCERT eBooks chapter wise in PDF format free from Studiestoday.com. This Accountancy textbook for Class 12 is designed by NCERT and is very useful for students. Please also refer to the NCERT solutions for Class 12 Accountancy to understand the answers of the exercise questions given at the end of this chapter

NCERT Book for Class 12 Accountancy Part 1 Chapter 1 Accounting for Not for Profit Organisation

Class 12 Accountancy students should refer to the following NCERT Book Part 1 Chapter 1 Accounting for Not for Profit Organisation in Class 12. This NCERT Book for Class 12 Accountancy will be very useful for exams and help you to score good marks

Part 1 Chapter 1 Accounting for Not for Profit Organisation NCERT Book Class 12

Accounting for Not-for-Profit Organisation

There are certain organisations which are set up for providing service to its members and the public in general. Such organisations include clubs, charitable institutions, schools, religious organisations, trade unions, welfare societies and societies for the promotion of art and culture. These  organisations have service as the main objective andnot the profit as is the case of organisations in business. Normally, these organisations do not undertake any business activity, and are managed by trustees who are fully accountable to their members and the society for the utilization of the funds raised for meeting the objectives of the organisation. Hence, they also have to maintain proper accounts and prepare the financial statement which take the form of Receipt and Payment Account; Income and Expenditure Account; and Balance Sheet. at the end of for every accounting period (normally a financial year).

This is also a legal requirement and helps them to keep track of their income and expenditure, the nature of which is different from those of the business organisations. In this chapter we shall learn about the accounting aspects relating to not-for-profit organisation.

1.1 Meaning and Characteristics of Not-for-Profit Organisation

Not-for-Profit Organisations refer to the organisations that are for used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aim is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase or sell goods and may not have credit transactions. Hence they need not maintain many books of account (as the trading concerns do) and Trading and Profit and Loss Account. The funds raised by such organisations are credited to capital fund or general fund. The major sources of their income usually are subscriptions from their members donations, grants-in-aid, income from investments, etc. The main objective of keeping records in such organisations is to meet the statutory requirement and help them in exercising control over utilisation of their funds. They also have to prepare the financial statements at the end of each accounting period (usually a financial year) and ascertain their income and expenditure and the financial position, and submit them to the statutory authority called Registrar of Societies.

The main characteristics of such organisations are:

1. Such organisations are formed for providing service to a specific group or public at large such as education, health care, recreation, sports and so on without any consideration of caste, creed and colour. Its sole aim is to provide service either free of cost or at nominal cost, and not to earn profit.

2. These are organised as charitable trusts/societies and subscribers to such organisation are called members.

3. Their affairs are usually managed by a managing/executive committee elected by its members.

4. The main sources of income of such organisations are: (i) subscriptions from members, (ii) donations, (iii) legacies, (iv) grant-in-aid, (v) income from investments, etc.

5. The funds raised by such organisations through various sources are credited to capital fund or general fund.

6. The surplus generated in the form of excess of income over expenditure is not distributed amongst the members. It is simply added in the capital fund.

7. The Not-for-Profit Organisations earn their reputation on the basis of their contributions to the welfare of the society rather than on the customers’ or owners’ satisfaction.

8. The accounting information provided by such organisations is meant for the present and potential contributors meet the statutory requirement.

1.2 Accounting Records of Not-for-Profit Organisations

As stated earlier, normally such organisations are not engaged in any trading or business activities. The main sources of their income are subscriptions from members, donations, financial assistance from government and income from investments. Most of their transactions are in cash or through the bank. These institutions are required by law to keep proper accounting records and keep proper control over the utilization of their funds. This is why they usually keep a cash book in which all receipts and payments are duly recorded. They also maintain a ledger containing the accounts of all incomes, expenses, assets and liabilities which facilitates the preparation of financial statements at the end of the accounting period. In addition, they are required to maintain a stock register to keep complete record of all fixed assets and the consumables.

Long Answer Questions

1. Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.

2. “Income and Expenditure Account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern”. Explain the statement.

3. Distinguish between Receipts and Payments Account and Income and Expenditure Account.

4. Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.

5. Show the treatment of the following items by a not-for-profit organisation:

(i) Annual subscription

(ii) Specific donation

(iii) Sale of fixed assets

(iv) Sale of old periodicals

(v) Sale of sports materials

(vi) Life membership fee

6. Show the treatment of items of Income and Expenditure Account when there is a specific fund for those items.

7. What is Receipt and Payment Account? How is it different from Income and Expenditure Account?


Please refer to attached file for NCERT Class 12 Accountancy Accounting For Not-for-Profit Organisation

Computerised Accounting System Chapter 01 Overview Of Computerised Accounting System
NCERT Class 12 Accountancy Computerised Accounting System Overview
Computerised Accounting System Chapter 02 Spreadsheet
NCERT Class 12 Accountancy Computerised Accounting Spreadsheet
Computerised Accounting System Chapter 03 Use Of Spreadsheet In Business Applications
NCERT Class 12 Accountancy Computerised Accounting Use Of Spreadsheet In Business Applications
Computerised Accounting System Chapter 04 Graphs and Charts For Business Data
NCERT Class 12 Accountancy Computerised Accounting Graphs and Charts For Business Data
Computerised Accounting System Chapter 05 Data Base Management System For Accounting
NCERT Class 12 Accountancy Computerised Accounting Spreadsheet Data Base Management System
Part 1 Chapter 01 Accounting for Not for Profit Organisation
NCERT Class 12 Accountancy Accounting For Not for Profit Organisation
Part 1 Chapter 02 Accounting for Partnership Basic Concepts
NCERT Class 12 Accountancy Accounting for Partnership Basic Concepts
Part 1 Chapter 03 Reconstitution of a Partnership Firm Admission of a Partner
NCERT Class 12 Accountancy Reconstitution of a Partnership Firm Admission of a Partner
Part 1 Chapter 04 Reconstitution of a Partnership Firm Retirement/Death of a Partner
NCERT Class 12 Accountancy Reconstitution of a Partnership Firm Retirement Death of a Partner
Part 1 Chapter 05 Dissolution of Partnership Firm
NCERT Class 12 Accountancy Dissolution of Partnership Firm
Part 2 Chapter 01 Accounting for Share Capital
NCERT Class 12 Accountancy Accounting for Share Capital
Part 2 Chapter 02 Issue and Redemption of Debentures
NCERT Class 12 Accountancy Issue and Redemption of Debentures
Part 2 Chapter 03 Financial Statements Of a Company
NCERT Class 12 Accountancy Financial Statements of a Company
Part 2 Chapter 04 Analysis of Financial Statements
NCERT Class 12 Accountancy Part 1 Analysis of Financial Statements
Part 2 Chapter 05 Accounting Ratios
NCERT Class 12 Accountancy Accounting Ratios
Part 2 Chapter 06 Cash Flow Statement
NCERT Class 12 Accountancy Cash Flow Statement

Accountancy NCERT Book Class 12 Part 1 Chapter 1 Accounting for Not for Profit Organisation

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NCERT Book Class 12 Accountancy Part 1 Chapter 1 Accounting for Not for Profit Organisation

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