Financial Statements of Not-for-Profit Organizations

Financial statements of not-for-profit organizations are prepared to provide information about their financial position, performance, and cash flows during a particular period. These statements help the stakeholders, such as donors, members, and government agencies, to assess the financial health of the organization and make informed decisions.

The financial statements of not-for-profit organizations include the following:

1. Statement of Financial Position: It shows the assets, liabilities, and equity of the organization as at a particular date. The statement of financial position is also known as the balance sheet.

2. Statement of Activities: It shows the revenue, expenses, gains, and losses of the organization during a particular period. The statement of activities is also known as the income statement or the statement of operations.

3. Statement of Cash Flows: It shows the inflows and outflows of cash and cash equivalents during a particular period. The statement of cash flows helps to assess the liquidity of the organization.

Jain Club Financial Statements

Statement of Financial Position as at 31st March 2018

Assets

Subscription 7520
Donation received 1600
Instance fees 860
Rent received 1050
Income on investment 590
Total assets 11620

Liabilities and Equity

Electric charges 680
Tax 100
Salary 4300
Honorarium to secretary 500
Stationary 70
Petty expenses 180
Insurance premium 60
Total liabilities and equity 6790

Statement of Activities for the year ended 31st March 2018

Revenue

Subscription 7520
Donation received 1600
Instance fees 860
Rent received 1050
Income on investment 590
Total revenue 11520

Expenses

Electric charges 680
Tax 100
Salary 4300
Honorarium to secretary 500
Stationary 70
Petty expenses 180
Insurance premium 60
Total expenses 6890

Net surplus for the year 4640

Statement of Cash Flows for the year ended 31st March 2018

Cash flow from operating activities

Net surplus for the year 4640
Adjustments for non-cash items
- Depreciation 0
- Amortization 0
- Gain on sale of assets 0
Changes in working capital
- Increase in subscription receivable (7520-0) 7520
- Increase in donation received receivable (1600-0) 1600
- Increase in instance fees receivable (860-0) 860
- Increase in rent received receivable (1050-0) 1050
- Increase in stationary payable (0-70) -70
- Increase in petty expenses payable (0-180) -180
Net cash provided by operating activities 15520

Cash flow from investing activities

Purchase of investment (0-590) -590
Net cash used in investing activities -590

Net increase in cash and cash equivalents 14930

Financial statements of not-for-profit organizations are crucial for stakeholders to make informed decisions. They provide valuable information about the financial health and performance of the organization. Jain Club's financial statements show that the organization has a net surplus for the year and a positive cash flow from operating activities. This indicates that the organization is financially stable and can meet its obligations.