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:4
    Answer:

    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

    INR

    ASSETS

    INR

    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

    View Answer
  • 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 2015

    Dr.

    Cr.

    Receipts

    INR

    Payments

    INR

    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 receivable INR 30.
    2) Outstanding special subscription for governor’s party amounted to INR 1,000.
    3) Subscriptions unpaid amounted to INR 100 for current year.
    4) The club owned sports material of the value INR 16,000 on 31st march 2014. This was valued at INR 13,500 on 31st march 2015.

    Marks:5
    Answer:

    Income and Expenditure A/c
    for the year ending 31st March 2015

    Expenditure

    INR

    Income

    INR

    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

    INR(16,000 – 13,500)

    1,950

    17,854

    17,854

    View Answer
  • 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 2015

    Dr.

    Cr.

    Receipts

    INR

    Payments

    INR

    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 INR 200 and INR 300 respectively. Sundry expenses outstanding on 31st March 2015 amounted to INR 80. Subscriptions accrued on 31st March 2015 amounted to INR 1,500.

    Marks:5
    Answer:

    Income and Expenditure A/c
    for the year ending 31st March 2015

    Expenditure

    INR

    Income

    INR

    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

    View Answer
  • Q4

    Following is the Receipts and Payments Account of a Football Club:
    Receipts and Payments Account

    as on 31st March 2015

    Dr.

    Receipts and Payments A/c Cr.

    Receipts

    INR

    Payments

    INR

    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:3
    Answer:

    Dr. Income and Expenditure A/c Cr.
    for the year ending 31st March 2015

    Expenditure

    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

    View Answer
  • 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

    INR

    Payments

    INR

    Subscriptions

     

     

     

    2013-14  

    50,000

     

     

    2014-15

    2,50,000

     

     

    2015-16

    25,000

     

     

     

    Marks:2
    Answer:

    Effect on final accounts:
    Dr. Income and Expenditure Cr.
    for the year ending 31st March 2015

    Expenditure

    INR

    Income

    INR

    By Subscriptions

    2,50,000

    Balance Sheet
    as on 31st March 2014

    Liabilities

    INR

    Assets

    INR

    Outstanding

    Subscriptions

    50,000

    Balance Sheet
    as on 31st March 2015

    Liabilities

    INR

    Assets

    INR

    Subscriptions

    received in advance

    25,000

    View Answer