The Accounting Of Non-Profit Making Organizations

Non-Profit Making Organization:
Non-Profit making organization are those, which do not buy/manufacture and sell goods and whose primary object is not to earn profit. Their object is to do goods to the society through welfare activities; e.g. clubs, school, colleges, hospitals, libraries etc.

Receipts And Payments Account:
A receipts and payments account is a summarized cash book for a given period.

Income And Axpenditure Account:
The account through which surplus or deficit of a non-profit marking organization is ascertained, is called income and expenditure account.

Subscription:
The amount received from the members of organization monthly or annually as per rules is called subscription.

Admission fee:
The amount which is paid by a new member at the time of admission in addition to subscription is called admission fee.

Legacy:
Legacy refers to property received by a virtue of a will of a person after his death. Acquisition of such property by an institution is regarded as capital receipt.

Life Membership Fee:
The amount which is paid by members lump sum to become a life member of organization is called life membership fee.

Donation:
Amount received from members and general public by way of gift is known as donation. It is to be treated as capital or revenue depends upon the purpose for which the donation is collected.

Capital Fund:
Excess of total assets over total external liabilities of a non-profit seeking organization is called capital fund. it is also known as general fund, accumulated fund or surplus fund.