Question

how can we differ the npo and profit earning organisation?

Answer 1

NPO =Non Profit Organisations

(E.g.=The Organisation Who doesnt work for Profits ,i.e-Charitable Trust ,Hospitals,NGOs

Profit Earning Organisation= Whose only Intention is to earn a Profit

E.g= Manufacture and Trading Organistation

Answer 2

Answer!!

Difference between NPO and Profit Earning Organisation:-

→ NPO (Not-for-Profit Organisation) is set up with a purpose to promote educational, cultural, professional, religious or public services. Profit earning organisation is set up with a purpose of earning profit.

→ In the Income and Expenditure Account of NPO, balance is either surplus or deficit. Balance in the Profit and Loss Account of the profit earning organisation is either Net Profit or Net Loss.

→ The surplus of NPO is not distributed among its members. The profit is distributed among the members of a profit earning organisation.

→ Financial statements prepared for NPO are Receipts and Payments Account, Income and Expenditure Account and Balance Sheet. Financial statements prepared for profit earning organisation are Trading Account, Profit and Loss Account and Balance Sheet.