NPO - Practical
- Final accounts of NPO comprise Receipts and Payments account, income and Expenditure accountand Balance Sheet.
- Receipts and Payments Account is a real account and prepared exactly like cashbook but it is not prepared date wise. Income and expenditure account is a nominal account and is prepared like profit and loss account of the trading concerns.
- Debit side of the account records expenses and credit side records incomes. There is Capital Fund or General fund in place of Capital.
- Receipts and Payments account show total subscription actually received during the year, while income and expenditure account show subscriptions related to current year irrespective of the fact whether it has been received or not.
- General donation appears on the debit side of the receipts and payments account in the year of receipt. General donation of small amount is credited to income and expenditure account and of big amount or donations for specific purpose are to be capitalised.
- Endowment fund is shown in the liabilities side of the Balance Sheet. It is not treated as income.
- Honorarium is shown in the expenditure side of the income and expenditure account.
- Grant from Government in the form of maintenance grant is treated as revenue receipt and credited to the income and expenditure account. However, grants such as building grant are treated as capital receipt and transferred to the building fund account.
- In case of, Fund Based Accounting, amount received on account of these funds are added to the specific funds and interest on any investment made on account of these funds is added to that fund and any expenses made are deducted from the fund. Hence amount received on account of specific funds are not shown as income and expenses on such account.
- Other adjustments dealt are, cost of consumables, sale of old assets etc.
- Generally Income and Expenditure account is prepared with the help of receipts and payments account.
- When Trial Balance is given debit side includes expenses and assets, while credit side includes incomes and liabilities.
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Q1
How will you deal with the given items while preparing the final accounts of a club for the
year ended on 31st March,2016:
Particulars
31.3.2015 (
)
31.3.2016 (
)
Outstanding Locker Rent
920
1,250
Advance Locker Rent
600
800
Locker rent received during the year 2015-16 is
6,400
Marks:4Answer:
Details
Amount
Locker Rent received during the year
6,400
Add: Outstanding Locker Rent 31.3.2016
1,250
Advance Locker Rent (31-3-2015)
600
8,250
Less: Outstanding Locker Rent (31-3-2015)
920
Advance Locker Rent(31.3.2016)
800
Income from locker Rent
6,530
BALANCE SHEET (AN EXTRACT)
As at 31St March, 2015
LIABILITIES
ASSETS
Advance Locker Rent
600
Outstanding Rent
920
BALANCE SHEET (AN EXTRACT)
As at 31 March, 2016
LIABILITIES
AMOUNT
ASSETS
AMOUNT
Advance Locker Rent
800
Outstanding Locker Rent
1,250
-
Q2
From the following Receipts and Payments Account prepare the Income and Expenditure of Noida Sports Club for the year ended 31st March 2015:
Receipts and Payments Account
as on 31st March 2015Dr.
Cr.
Receipts
Payments
To Balance b/d
300
By Rent
5,200
To Entrance fees
550
By Stationery
3,068
To Subscriptions
By Wages
5,330
2013-14
200
By Billiards table
3,900
2014-15
16,900
By Repairs
806
2015-16
300
By Interest
1,500
To Locker rent
500
By Balance c/d
2,396
To Special subscription
for Governor’s party
3,450
22,200
22,200
The following additional information is available.
1) Locker rent receivable30.
2) Outstanding special subscription for governor’s party amounted to1,000.
3) Subscriptions unpaid amounted to100 for current year.
4) The club owned sports material of the value16,000 on 31st march 2014. This was valued at
13,500 on 31st march 2015.
Marks:5Answer:
Income and Expenditure A/c
for the year ending 31st March 2015Expenditure
Income
To Rent
5,200
To Stationery
3,068
By Subscriptions 16,900
To Wages
5,330
Add:
To Repairs
806
Outstanding
100
17,000
To Interest
1,500
By Locker rent
500
To Depreciation on
Add. Receivable
30
530
Sports material
By Deficit
324
(16,000 – 13,500)
1,950
17,854
17,854
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Q3
From the following Receipts and Payments Account prepare the Income and Expenditure of Delhi Sports Club for the year ended 31st March 2015.
Receipts and Payments Account
as on 31st March 2015Dr.
Cr.
Receipts
Payments
To Balance b/d
3,200
By Salary
1,500
To Subscriptions
22,500
By Rent
800
To Entrance fees
1,250
By Electricity
3,500
To Donations
2,500
By Taxes
1,700
To Rent of hall
750
By Stationery
380
To Sale of investment
3,000
By Sundry expenses
920
By Govt. Bonds
10,000
By Books purchased
7,500
By F.D. with Bank
5,000
By balance c/d
1,900
33,200
33,200
Opening and closing stock of stationery amounted to
200 and
300 respectively. Sundry expenses outstanding on 31st March 2015 amounted to
80. Subscriptions accrued on 31st March 2015 amounted to
1,500.
Marks:5Answer:
Income and Expenditure A/c
for the year ending 31st March 2015Expenditure
Income
To Salary
1,500
By Subscriptions
To Stationery cons.
380
22,500
Add Opening stock
200
Add accrued
1,500
24,000
Less Closing stock
300
280
To Rent
800
By Donation
2,500
To Electricity
3,500
By Rent of hall
750
To Taxes
1,700
To Sundry expenses
920
Add Outstanding
80
1,000
To Surplus
18,470
27,250
27,250
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Q4
Following is the Receipts and Payments Account of a Football Club:
Receipts and Payments Accountas on 31st March 2015
Dr.
Receipts and Payments A/c Cr.
Receipts
Payments
To Balance b/d
40,000
By Honorarium
12,000
To Donations
60,000
By Books
5,000
To Subscriptions
50,000
By General
To Life
Expenses
9,000
By Furniture
40,000
Membership Fees
20,000
By Balance C/d
54,000
1,20,000
1,20,000
40% of the donations are to be capitalised.
Show the effect of the above in Income and Expenditure Account.Marks:3Answer:
Dr. Income and Expenditure A/c Cr.
for the year ending 31st March 2015Expenditure
₹
Income
₹
To Honorarium
12,000
By Subscriptions
50,000
To General
By Donation
36,000
Expenses
9,000
To Surplus
65,000
86,000
86,000
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Q5
Show the effect of the following in final accounts for the year 2014-15 of a not for profit organisation:
Dr.
Receipts and Payments A/c Cr.
Receipts
Payments
Subscriptions
2013-14
50,000
2014-15
2,50,000
2015-16
25,000
Marks:2Answer:
Effect on final accounts:
Dr. Income and Expenditure Cr.
for the year ending 31st March 2015Expenditure
Income
By Subscriptions
2,50,000
Balance Sheet
as on 31st March 2014Liabilities
Assets
Outstanding
Subscriptions
50,000
Balance Sheet
as on 31st March 2015Liabilities
Assets
Subscriptions
received in advance
25,000