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Accounts For Non-Trading Concern.

In respect the above description about the Trading, P&L and also Balance Sheet which maintain by only trading concern but not trading concern like school, college, club, charitable institutions, NGO should not be maintained such rather they will prepared Receipt & payment A/c, Income & expenditure A/c and finally Balance Sheet. A non-trading concern is also known as a non-profit making entity that receives donations and grants from the public and government and uses them to serve the community. The management is responsible for the accounts of a non-trading concern and prepares a balance sheet and Receipt & payment, income & expenditure account at year end.

The details description about Receipt & payment A/c, Income & expenditure A/c and Balance Sheet of a non-trading concern as follows.

Receipt & Payment A/c - A receipt and payment account is a summary of actual cash receipts and payments extracted from the cash book over a certain period. All cash received and paid during the period whether of capital or revenue is included in this account. All receipts are entered on the debit side & payments are entered in credit side.
The receipt and payment account commences with the opening balance of cash and similarly closes with the balance of cash at the end of the period. It is only summary of cash transactions, it does not include any income or expenditure outstanding and naturally fails to reveal the actual income or expenditure of the period it covers.


Specimen of Receipt & Payment Account as follows

Receipt & Payment Account as on Dt – ___________

RECEIPTS AMOUNT PAYMENT AMOUNT
To. BALANCE B/D XXX By. EQUIPMENT EXPENSES XXX
CASH : XXX By. ELECTRICITY EXPENSES XXX
BANK : XXX By. PRINTING & STATIONERY XXX
By. WAGES & SALARIES XXX
To. SUBSCRIPTION RECEIVED XXX By. EXHIBITION EXPENSES XXX
To. ENTRANCE FEES XXX By. OFFICE EXPENSES XXX
To. INTREST ON INVESTMENT By. POSTAGE EXPENSES XXX
By. FURNITURE EXP. XXX
To. DONATIONS XXX BY. RENT, RATE & TAXES XXX
To. SUNDRY RECEIPTS XXX By. HONORARIUM EXP. XXX
To. LIFE MEMBERSHIP FEES. XXX By. BALANCE C/D XXX
CASH : XXX XXX
BANK : XXX

Here one thing must be remember that opening cash & bank must be come from previous year closing which has been shown in last year Balance Sheet.

INCOME & EXPENDITURE ACCOUNT

The income and expenditure account is an account prepared by non-trading concerns to ascertain surplus or deficit of income over expenditures for a particular period. It is prepared as a part of final accounts of non-trading concerns which is equivalent to profit and loss account prepared by trading concern. The accrual concept of accounting is strictly followed while preparing income and expenditure account of non-trading entities.

If revenues of a non-trading concern exceed its expenditures during the year, the income and expenditure account shows a surplus balance; and if, on the other hand, the expenditures exceed income, the account shows a deficit balance.

INCOME & EXPENDITURE ACCOUNT AS ON DTD: ____________

EXPENDITURE AMOUNT INCOME AMOUNT
To. TOURNAMENT EXP. XXX By. SUBSCRIPTION RECEIVED XXX
To. ELECTRICITY EXP. XXX By. GRANTS RECEIVED XXX
To. PRINTING& STATIONERY XXX By. DONATION RECEIVED XXX
To. WAGES & SALARIES XXX By. INTREST ON DEPOSITS XXX
To. DEPRICIATION ON FIXED ASSETS XXX By. PROFIT ON SALE OF FIXED ASSETS XXX
To. REPAIR & MAINT. EXP XXX By. SALE OF OLD NEWSPAPER & MAAZINE XXX
To. POSTAGE EXP. XXX By. MISC. INCOME XXX
To. RENT,RATE & TAXES XXX
To. AUDIT FEES XXX
To. LOSS ON SALE OF FIXED ASSETS XXX
To. OFFICE EXP. XXX
TO. MISC EXPENSES XXX
To. SURPLUS XXX By. DEFICIT XXX
(EXCESS OF INCOME OVER EXPENITURE. (EXCESS OF EXPENDITURE OVER INCOME)

BALANCE SHEET

Lastly Balance Sheet prepared for conclude the result about Assets & liability position of the business concern at the end of an accounting period. The basic principles for preparing the balance sheet of non-trading concerns are same as of trading concerns. The balance sheet of non-trading concerns may be prepared either in the order of permanence or in the order of liquidity. In trading concern Balance Sheet, adjustment entry must be posted as like in Non-trading concern adjustment entry also be posted.

Specimen of Balance Sheet.
BALANCE SHEET AS ON DT : _____________

LIABILITY AMOUNT ASSETS AMOUNT
CAPITAL XXX FIXED ASSETS XXX
Add: SURPLUS XXX XXX Less :DEPRICIATION XXX XXX
SUBSCRIPTION RECEIVED IN ADVANCE XXX SUBSCRIPTION RECEIVABLE XXX
OUTSTANDING EXPENSES XXX PREPAID EXPENSES XXX
CASH IN HAND XXX
CASH AT BANK XXX
XXX XXX

These are all about Receipt & Payment, Income & expenditure and Balance Sheet of a Non-trading concern which has clarify in above with proper example.

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