Revision: Accounts of ‘Not for Profit’ Concerns Accounts HSC Commerce (English Medium) 12th Standard Board Exam Maharashtra State Board

Difference Between Profit Organisations and Not-for-Profit Organisation

Point	Profit Organisations	Not-for-Profit Organisations
Objective	Earn profit	Provide service
Trial Balance	Prepares Trial Balance	Prepare Receipts & Payments A/c
Statements	Trading A/c, P&L A/c, Balance Sheet	Receipts & Payments A/c, Income & Expenditure A/c, Balance Sheet
Result	Net Profit / Net Loss	Surplus / Deficit
Capital Fund	Owner’s capital + reserves	Capital fund from surplus, donations, etc.

Key Points: Not-Profit Concern

Not-for-profit concerns aim to provide services to society rather than to earn profit and include clubs, schools, hospitals, and charitable trusts.
They prepare the Receipts and Payments Account, the Income and Expenditure Account, and the Balance Sheet instead of the Trading and Profit & Loss Accounts.
Their income sources include subscriptions, donations, grants, admission fees, and government subsidies.
These organisations are managed by elected members and do not distribute profits or dividends to members.
They maintain books of accounts to ensure transparency, legal compliance, and control over funds, and to determine surplus/deficit and net worth.

Key Points: Receipts and Payments Account

Receipts and Payments Account is a real account that records all cash and bank transactions (revenue or capital) during the year, regardless of the period they relate to.
It is similar to a cash book and starts with opening balances of cash and bank, and ends with closing balances.
Revenue receipts (e.g. subscriptions, rent) go to Income & Expenditure A/c, while capital receipts (e.g. donations for building) are shown in the Balance Sheet.
Revenue payments (e.g. salaries, taxes) are shown in Income & Expenditure A/c, and capital payments (e.g. purchase of assets) are shown on the Asset side of the Balance Sheet.
Deferred revenue expenditure is a revenue expense giving benefits for multiple years, partly shown in Income & Expenditure A/c and partly in the Balance Sheet.

Key Points: Income and Expenditure Account

The Income and Expenditure Account is a Nominal Account that records revenue incomes and expenses of the current year only.
It is similar to the Profit and Loss Account and is prepared by not-for-profit organisations.
It includes items whether received/paid or outstanding/prepaid, as long as they relate to the current year.
The result may be Surplus (income > expenses) or Deficit (expenses > income), which is adjusted in the Capital Fund.
It has no opening balance and includes both cash and non-cash items like depreciation, bad debts, and outstanding expenses.

Format: Receipts and Payments Account

Receipts and Payments Account

for the year ended 31st March 20......

Dr. Cr.

Receipts	Amount ₹	Payments	Amount ₹
To All Receipts	............	By All Payments	............
(Revenue or Capital)		(Revenue or Capital)
Previous year – ............		Previous year – ............
Current year – ............		Current year – ............
Next year – ............		Next year – ............

Format: Income and Expenditure Account

In the books of......

Income and Expenditure Account

For the year ended 31st March 20.....

Dr. Cr.

Expenditure	Amt ₹	Amt ₹	Income	Amt ₹	Amt ₹
To Salaries paid	xxx		By Subscription Received	xxx
Less: paid for last year	xxx		Less: i) received for last year ii) received of next year	xxx xxx	xxx
paid for next year	xxx
Add: Outstanding	xxx
Add: Prepaid for last year	xxx	xxx	Add: i) Received during last year for current ii) Outstanding for current year	xxx xxx	xxx
To Wages		xxx
To Printing and Stationery		xxx
To Rent		xxx	By Rent Received		xxx
To Interest		xxx	By Interest Received		xxx
To Conveyance		xxx	By Dividend Received		xxx
To Rates & Taxes		xxx	By Govt. Grants (General)		xxx
To Insurance Premium		xxx	By Ground Rent		xxx
To Audit Fees		xxx	By Sundry Receipts		xxx
To Office Expenses		xxx	By Entrance Receipts (Revenue)		xxx
To Telephone / Mobile Expenses		xxx	By Entrance Fee (Revenue)		xxx
To Medicines		xxx	By Admission Fees		xxx
To Sports Materials consumed during the year Opening Stock Add: Purchases Less: Closing Stock	xxx xxx xxx	xxx	By Donations (General)		xxx
			By Profit on Sale of Asset		xxx
			By Deficit (Excess of expenditure over income)		xxx

To Repairs and Maintenance		xxx
To Electricity Charges		xxx
To Newspapers and Periodical		xxx
To Sundry Expenses		xxx
To Loss on Sale of Asset		xxx
To Depreciation on Fixed Assets		xxx
To Surplus (Excess of Income over Expenditure)		xxx
Total		xxx	Total		xxx

Format: Receipts and Payments Account (Detailed)

In the books of........

Receipts and Payments Account

For the year ended 31st March 20......

Dr. Cr.

Receipts	Amt ₹	Amt ₹	Payments	Amt ₹	Amt ₹
To Balance b/d Cash in Hand Cash at Bank (Name of Banks)	xxx xxx	xxx	By Balance b/d (Bank overdraft)		xxx
			By Salaries Previous year Current year	xxx xxx	xxx
			By Salaries Previous year Current year	xxx xxx	xxx
To Subscriptions Previous year Current year Next year	xxx xxx xxx	xxx	By Rent Rates and Taxes Previous year Current year Next year	xxx xxx xxx	xxx



To Entrance fees		xxx	By Printing and Stationery		xxx
To Admission fees		xxx	By General Expenses		xxx
To Life membership fees		xxx	By Interest on Bank Loan		xxx
To Legacies		xxx	By Electricity Charges		xxx
To Govt. Grants		xxx	By Audit Fees		xxx
To Donations (General)		xxx	By Tournaments Exp.		xxx
To Donations for specific fund, Building Fund, Prize Fund, Tournament Fund		xxx xxx xxx xxx	By Wages		xxx
			By Purchase of Sports Materials		xxx
			By Insurance		xxx
To Dividend - Received		xxx	By Telephone / Mobile Exp.		xxx
To Hire / Rent of Hall received		xxx	By Bank Charges		xxx
To Sundry Income		xxx	By Postage		xxx
To Sale of old materials		xxx	By Conveyance		xxx
To Sale of old News Papers / Scrap		xxx	By Expenses for Annual Function		xxx
To Misc. Receipts		xxx	By Fixed Deposit		xxx
To Tournaments Receipts		xxx	By Purchase of Fixed Assets Books Furniture Building Investments		xxx xxx xxx xxx xxx
To Cricket Fees		xxx
To Tuition Fee		xxx
To Term Fees		xxx
To Collection of Fine		xxx
To Locker Rent		xxx	By News Papers		xxx
To Exam Fees		xxx	By Office Expenses		xxx
To Balance c/d (Bank overdraft)		xxx	By Repairs		xxx
			By Balance c/d		xxx
			Cash in Hand
			Cash at Bank (Names of Bank)		xxx xxx
			Cash at Bank (Names of Bank)		xxx xxx
Total		xxx	Total		xxx

Receipts and Payments Account vs. Income and Expenditure Account

Basis	Receipts & Payments A/c	Income & Expenditure A/c
Type of Account	Real Account	Nominal Account
Nature	Like a Cash Book	Like Profit & Loss Account
Purpose	Summary of cash transactions	To find net income or loss
Opening Balance	Has an opening cash/bank balance	No opening balance
Closing Balance	Shows cash/bank at period end	Shows surplus or deficit
Includes	All receipts & payments (capital + revenue)	Only current period income & expenses
Non-cash Items	Not included	Included (e.g., depreciation, provisions)
Accounts Covered	Personal, Real, Nominal	Only Nominal
Period Covered	All periods (past, current, future)	Only the current period
Balance Sheet	Not necessarily required	Always accompanied by Balance Sheet

Format: Balance Sheet

Balance Sheet as on 31st March 20......

Liabilities	Amt ₹	Amt ₹	Assets	Amt ₹
Capital Fund (Opening Balance)	xxx		Cash in Hand	xxx
Add: i) Donations (Capitalised) ii) Entrance fees (Capitalised) iii) Surplus			Cash at Bank	xxx
	xxx		Fixed Deposit	xxx
	xxx		Investments	xxx
	xxx		Sundry Debtors	xxx
	xxx		Land and Buildings	xxx
Less: Deficit	xxx	xxx	Furniture and Fixtures	xxx
Building Fund		xxx	Plant and Machinery	xxx
Endowment Fund		xxx	Equipments	xxx
Tournament Fund		xxx	Play Ground	xxx
Special Fund		xxx	Motor Vehicles	xxx
Charity Fund		xxx	Library Books	xxx
Sundry Creditors		xxx	Stock of Sports Materials	xxx
Bank overdraft		xxx	Stock of Stationery	xxx
Other Loan		xxx	Stock of Drugs	xxx
Outstanding Expenses		xxx	Loans and Advances given	xxx
Pre Received Income (Subscription received in advance)		xxx	Accrued Interest	xxx
Pre Received Income (Subscription received in advance)		xxx	Prepaid Expenses	xxx
Life Membership Fees		xxx	Outstanding Income	xxx
		xxxx		xxxx

Adjustments of Balance Sheet

Topic	Key Points
Outstanding Expenses	Add to Expenditure A/c + Show as Liability in Balance Sheet
Prepaid Expenses	Deduct from Expenditure A/c + Show as Asset
Outstanding Income	Add to Income A/c + Show as Asset
Income Received in Advance	Deduct from Income A/c + Show as Liability
Subscriptions	Current year – Income A/c Previous/Next year – Adjust accordingly Outstanding – Add to Income A/c
Depreciation	Debit to Expenditure A/c + Deduct from Asset in Balance Sheet
Entrance Fees	If capitalised – Add to Capital Fund. If revenue – Income A/c
Donations	General – Revenue (Income A/c) Specific – Capital (Liability side)
Stationery / Consumables	Consumption = Opening + Purchases + Outstanding – Closing Show consumption in Expenditure A/c and closing stock as Asset
Opening Balances	Used for preparing Opening Balance Sheet. Capital Fund shown as liability.

Revision: Accounts of ‘Not for Profit’ Concerns Accounts HSC Commerce (English Medium) 12th Standard Board Exam Maharashtra State Board

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