NON-PRIFIT MAKING ORGANIZATIONS

What Non-Profit Making Organization are?
People join together for a member of reason in voluntary organization: for mutual Entertainment, for protection or for professional reasons. There are sports clubs, trade unions, consumer societies, political associations, and many more. The degree of richness of any society lies partly in the variety of the voluntary organization it promotes.

Non-profit making organization are those, which do not buy/manufactures and sell goods and whose primary object is not to earn profit. Their object is to do good to the society through welfare activities; e.g. clubs, schools, colleges, hospitals etc. For more details: non-profit Making Organizations:

From the book-keeping point of view the aim of such organizations is the pursuit of some interest other then financial benefit, so these may be termed as Non-profit making Organization. Although these organization are not meant for profit earning, yet organization of this sort must have funds of promote their activities, and these funds must be honestly accounted for. For example in case of a club, the official elected for this purpose is called the “Treasurer”, one of the key figures on the committee which is elected to run the club. The others are the secretary, responsible for organizing the club’s activities, and the chairperson, or president, who controls the meetings.

The treasure’s functions are to collect subscriptions, disburse such funds as are needed in the course of the activities, and report to the members when required, but especially at the annual General meeting an important occasion in the club’s life. At this meeting the activities of the club are reviewed, criticisms are voiced, or praise is accorded the committee.

How Activities are accounted for? - An example of a club
Club rarely keep a full set of ledger Account’s but some clubs are very large indeed and need just as huge an organization as any other large scale business. Such huge organizations can hardly conduct their affairs with a simple cash book, yet many clubs treasurers in small clubs do exactly that, while bigger clubs usually have just a cash book with analysis columns. This analytical cash book is a basic club record or “book of original entry. But most of the clubs maintain a simple cash book as by business concerns.

In this type of book the treasurer keeps a record of all sums received and paid; and ANALYSIS, them into various sub-headings as he goes along. All cash transactions are first recorded in the cash book, then posting is made into the Ledger and finally trial balance is prepared. Rests of the transactions are entered in general journal. Now see how record the transactions of a club in the books of accounts and prepare final Accounts at the end.