Accounting for Non Profit Organization

Non profit organizations are those organizations that are established for public welfare and not for profit. These organizations are mainly established for religious, charitable, educational, and other purposes. Non profit organizations do not have any owners and the surplus generated is reinvested in the organization for further growth and development.

Accounting for Tournaments in Non Profit Organization

Tournaments are one of the common activities organized by non profit organizations. The tournaments organized by non profit organizations aim to raise funds for the organization's activities. The accounting treatment of tournaments in non profit organizations involves the following items:

1. Tournament Fund: Tournament fund is the amount of money raised by the non profit organization through the tournament. The tournament fund is shown as a liability in the balance sheet of the non profit organization. The tournament fund is a type of restricted fund, which means that the funds raised through the tournament can only be used for the specific purpose for which the tournament was organized. In this case, the tournament fund is ₹2,00,000.

2. Tournament Expenses: Tournament expenses are the expenses incurred by the non profit organization for organizing the tournament. The tournament expenses include expenses such as prizes, refreshments, venue rent, etc. The tournament expenses are shown as an expense in the income and expenditure account of the non profit organization. In this case, the tournament expenses are ₹60,000.

3. Receipts from Tournament: Receipts from the tournament are the amount of money received by the non profit organization from the tournament. The receipts from the tournament are shown as income in the income and expenditure account of the non profit organization. In this case, the receipts from the tournament are ₹80,000.

Conclusion

The accounting treatment of tournaments in non profit organizations involves the recognition of tournament fund, tournament expenses, and receipts from the tournament. The tournament fund is shown as a liability in the balance sheet of the non profit organization, while the tournament expenses and receipts from the tournament are shown as expenses and income respectively in the income and expenditure account of the non profit organization.