Question

a). What name is used for profit in case of not for profit organisations?​

Answer 1

Answer: Surplus

In case of "Not For Profit" organisations, Surplus is found out.

"Not For Profit" organisations aims to give services to its members. They are not formed for making profits. As their main objective is not to earn profit, instead of Profit and Loss Account, Income and Expenditure account is prepared.

The Income and Expenditure account shows Surplus or Deficit of the firm, during a particular period.

Excess of Income over Expenditure is known as Surplus whereas, Excess of Expenditure over Income is known as Deficit.

This surplus is added to the Capital Fund, while the deficit is deducted from the same.

Thus, in case of Not for profit organisations, Surplus is found out, and not profit.