MEANING:-It is an organization set up not for earning profit but for a charitable or society purpose. This is set up only for the welfare of the society. Here main motive not for earning profit but to serve people.
FOR EXAMPLE:-Schools, Charitable hospitals, club, literacy societies etc.
Characteristics:-
1.ENTITY :- NPO are separate entity promoted by individuals or companies.
2. SERVICES
3. FORM
4. NO PROFIT MOTIVE
Profit Organisation (Npo)
ACCOUNTING PROCEDURE FOR NPO.
The books of accounts generally maintained by every NPO are:-
1. Cash-book
2. Ledger
3. Member`s register
4. Register of assets
IN NPO MAIN ACCOUNTS ARE AS FOLLOWS A. Recipts and payments accounts
B. Income and expenditure accounts
C. Balance sheet (at the beginning/memorndum/extract)
D. Balance sheet (at the closing)
A. RECIPTS AND PAYMENTS ACCOUNTS :- IT is a summary of cash book and bank transactions. All receipts (whether capital or revenue) are shown on the left hand side (Dr.side) and all payments are shown on the right hand side (cr. Side) This accounts starts and ends with cash and bank balance. It is Real in nature.
Name Of The Organisation Recipts And Payments Account For The Period Ended
| PARTICULARS | AMOUNT (RS.) | PARTICULARS | AMOUNT (RS.) |
| TO BAL B/D |
ALL PAYMENTS I.E… | ||
| -CASH +++ | - SALARIES | +++ | |
| -BANK +++ | +++ | - INSURANCE | +++ |
| (ALL RECIPTS OR INCOME I.E…….. | - EXPENSES | +++ | |
| -SUBSCRIPTION -SALE OF OLD |
+++ +++ |
- STATIONERY | +++ |
| NEWSPAPER |
|||
| -DONATIONS | +++ | ||
| TO CRICKET FUND | +++ | BY BAL C/D - CASH +++ - BANK +++ |
++++ |
| +++++++ | ++++++ |
