Question

Difference between trading and non trading organization

Answer 1

The difference between a trading and non-trading organization is that a non-trading organization does not exist to make a profit whereas a trading organization does. Non-trading organizations exist to provide voluntary services to the public. Trading organizations exist to provide services or goods for profit.

Answer 2

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.