class 12th accountancy chapter 1 exercise solution
Answers
Answer:
1. Non-profit organizations are formed to provide services to a specific group or general public, such as education, health care, entertainment, sports, etc. without considering caste, creed, and color. Your sole goal is to provide a service free or at a nominal cost, not a profit.
2. These are organized as charitable societies or trusts, and members of that organization are called members.
3. Its affairs are usually managed by a management / executive committee elected by its members.
4. The primary sources of income for these organizations are member membership, donations, wills, etc.
5. Funds raised by non-profit organizations through various sources are deposited into capital funds or general funds. The surplus generated as income over expenses is not distributed among the members.
6. These organizations earn their reputation based on their contribution to society’s welfare and not on the satisfaction of customers or owners.
7. These organizations’ accounting information is for current and prospective taxpayers and compliance with legal requirements.
Explanation:
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Answer:
class 12 accounting chapter 1 is Accounting for Non-Profit Organizations.
Non-profit organizations are established to provide services to a particular group or general public like education, health care, entertainment, sports etc. irrespective of caste, creed and colour. Your sole objective is to provide a service for free or at nominal cost, not profit.
Explanation:
The receipt and payment account is a summary of the cash books. All cash receipts are recorded on the receipt side (i.e. Debit side) and all cash payments are recorded on the Payment side (i. It is compiled on the basis of cash and bank transactions recorded in the Cash Book. It begins with the opening cash and bank balances and ends with the closing cash balances and banks (balance sheet data) at the end of the accounting period. Records all cash and bank transactions of a capital and revenue nature. Records not only cash and bank transactions relating to the current accounting period, but also cash and bank receipts (or payments) received during the current accounting period periods that may relate to the previous or following accounting period.
This account only helps us to know the final cash and bank balance and helps in assessing the cash position of the non-profit organization.
The income and expenditure account is similar to the profit and loss account in the sense that while the former is prepared to ascertain the surplus or deficit during the accounting period, the latter is prepared to ascertain the net profit or net loss incurred during the accounting period. The I&E Account is a nominal account and is prepared on an accrual basis. It records all transactions of a revenue nature that relate to the current accounting period (whether outstanding or prepaid) for which accounting is maintained. All expenses and losses are recorded on the debit side (expenditure side) and all income and profits are recorded on the credit side (income side) of the I&E account.
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