Difference between trading and non trading concern
Answers
1) MOTIVE
The main motive of trading organization is to earn profit
The main motive of Non trading organization is to render service to members and society.
2) FUNDS
In a Trading orgaisation, funds are represented by capital contributed by proprietors and accumulated reserves
In a Non trading Organization funds are represented by capital fund compromising in the form of donations , subscriptions and surplus.
3) FINANCIAL STATEMENTS
In a trading organization, Manufacturing A/C, Trading A/C ,Profit and Loss A/C and Balance Sheet are prepared.
In a non trading organisation, Receipts and Payments A/C, Income and Expenditure A/C and Balance Sheet are prepared.
4) SURPLUS/PROFITS
The balance of the Profit and Loss A/C is either net profit ot net loss.
The balance of the Income and Expenditure A/C is either surplus or deficit.