Describe the object of mentioning book keeping by not-for-profit concerns.
Answers
ANSWER :
Not-for-profit concern or not-for-profit organisation or non-profit-seeking organisations are the organisations which are established not to earning profit, but for providing services to its member and the society. Govt. educational institution, Recreation clubs, Govt. hospital etc. are examples of some not for profit concerns. Not-for-profit concerns get its funds from the member of the organization as subscription and also from the public as donation. Moreover, such concerns sometimes get funds from the government in the form of grants.
Unlike the profit seeking concern, not for profit concerns also maintain book keeping and record transactions in the books of accounts.
- The object of maintaing book keeping by a not-for-profit concern is to ascertain the surplus or deficit resulting from the activities of the concern.
Not-for-profit concerns prepare Recepits and Payment Account to keep proper record of cash received and cash payment and presented to its members so as to inform its members the amount received/spent during a particular period at the end of the period. Income and Expenditure Account is prepared by not-for-profit concerns to see whether the revenue (incomes) of a particular periof are sufficient to cover the expenses of that period. Again, the Balance Sheet is prepared by not-for-profit concerns at the end date of the accounting period to ascertain the financial position; i.e, the value of assets and liabilities of the organization.