Question

Income and expenditure account, prepared by 'Not for Profit' concerns, must be accompanied by balance sheet. (State True or False)

Answer 1

TRUE.................

Answer 2

Answer:

True

Explanation:

Income and expenditure account, prepared by 'Not for Profit' concerns, must be accompanied by balance sheet. - True

Some organizations are created to render services to their employees or to society as a whole, not to earn earnings. Schools, clubs, hospitals, for instance. Such organizations ' main motivation is to provide service. Non-profit organizations (NPOs) prepare income and expenditure accounts and balance sheets at the end of the accounting year to determine the financial efficiency (i.e. surplus or deficit).

In the case of profit-seeking entities, i.e. commercial organizations, public limited companies or business concerns, Profit and Loss Account is willing to determine the profit earned or loss incurred during the year and Balance Sheet is willing to know the financial position of the business.