Balbharati solutions for Book-keeping and Accountancy 12th Standard Hsc Maharashtra State Board
Chapter 2 - Accounts of ‘Not for Profit’ Concerns [Latest edition]
Answer in one sentence only.
What do you mean by ‘Not for Profit’ Concern?
A concern or organisation which is formed and established to serve its members and society or general public by undertaking various activities without any profit motive is called a ‘Not for Profit’ concern.
Which organisations prepare Income and Expenditure Account?
‘Not for profit’ concern prepares Income and Expenditure Account.
What is Receipts and Payments Account?
An account which is prepared by a ‘Not for Profit Concern’ to record a summary of all types of cash receipts and cash payments inclusive of bank transactions is called receipts and Payments Account.
Why Income and Expenditure Account is prepared?
Income and Expenditure Account is prepared to ascertain, whether the concern has sufficient incomes to meet its expenses, or not.
What is Capital Fund?
Excess of Assets over Liabilities is known as Capital Fund which also consists of contributions, subscriptions, entrance fees, surplus income, etc.
What is a Subscription?
Subscription is the periodical payment made by the members to the ‘Not for Profit’ concern for maintaining his membership.
What is ‘Legacy’?
Any asset, property or amount of cash which ‘Not for Profit’ concern receives as per the provisions made in the will of the donor after his death is called Legacy.
What is Surplus?
Excess of income over expenditure shown by Income and Expenditure Account represents Surplus for the financial year.
To which account ‘Surplus’ or ‘Deficit’ is transferred?
‘Surplus’ or ‘Deficit’ is transferred to Balance Sheet by adding it or subtracting it from Capital Fund.
Difficult Words & Meanings
- Concern: An organization or business.
- Motive: A reason for doing something. Established: Set up or founded.
- Undertaking: Starting or engaging in a task or project.
- Receipts: Amounts of money received.
- Payments: Amounts of money paid out.
- Inclusive: Including all the items or services mentioned.
- Ascertain: To find out for certain; to make sure of.
- Sufficient: Enough; adequate.
- Assets: Items of value owned by an organization.
- Liabilities: Debts or financial obligations of an organization.
- Contributions: Money or items given to an organization.
- Subscriptions: Regular payments made to be a member of an organization or to receive a service.
- Entrance Fees: A one-time payment made to join an organization.
- Surplus: An amount of something left over when requirements have been met; in this context, when income is greater than expenditure.
- Periodical: Occurring or appearing at regular intervals.
- Provisions (in a will): Conditions or terms stated in a will.
- Donor: A person who gives something, especially money, to a charity or organization.
- Expenditure: The action of spending funds; an amount of money spent.
- Deficit: The amount by which something, especially a sum of money, is too small; in this context, when expenditure is greater than income.
- Balance Sheet: A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time.
- Not for Profit Concern: An organization that does not operate for the purpose of making a profit, but rather to provide services or benefits to its members or the public.
- Income and Expenditure Account: A financial statement prepared by not-for-profit organizations to show their income and expenses for a specific period, similar to a profit and loss account for businesses.
- Receipts and Payments Account: A summary of cash and bank transactions for a specific period, showing all cash inflows (receipts) and outflows (payments).
- Capital Fund: The equivalent of capital in a for-profit business, representing the accumulated surplus and other capital receipts of a not-for-profit organization.
- Legacy: A gift of money or property left to someone or an organization in a will.
