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Non-profit organizations prepare all of the following accounts except the
- a)Balance sheet
- b)Income statement
- c)Income and expenditure account
- d)Receipt and payment account
Correct answer is option 'B'. Can you explain this answer?
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Non-profit organizationsprepare all of the following accounts except t...
Becase Not-profit organisation is established for welfare and services for society and the member.they do not operate with objective of earning profit..so that income statement is not prepared in this organisation.
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Non-profit organizationsprepare all of the following accounts except t...
Non-profit organizations and their accounts
Non-profit organizations are entities that are established for a specific purpose other than making a profit. Their primary objective is to serve the public, and they may include charities, religious organizations, educational institutions, and social welfare organizations.
Accounts prepared by non-profit organizations
Non-profit organizations prepare various accounts to keep track of their financial transactions and to ensure that their operations are transparent. The following are the main accounts prepared by non-profit organizations:
1. Balance sheet: A balance sheet is a statement that shows the financial position of a non-profit organization at a specific point in time. It includes the organization's assets, liabilities, and net assets (or fund balances).
2. Income and expenditure account: This account shows the organization's income and expenditure for a specific period, usually a year. It includes all the revenue earned by the organization and all the expenses incurred during the period.
3. Receipt and payment account: This account records all the cash transactions of the organization during a specific period. It includes all the cash receipts and payments made by the organization.
Accounts not prepared by non-profit organizations
Although non-profit organizations prepare various accounts to track their financial transactions, they do not prepare an income statement. The reason for this is that non-profit organizations do not have a profit motive, and therefore, their financial performance cannot be measured in terms of profit or loss.
Conclusion
In summary, non-profit organizations prepare various accounts, including a balance sheet, income and expenditure account, and receipt and payment account. However, they do not prepare an income statement as they do not have a profit motive.
Non-profit organizations are entities that are established for a specific purpose other than making a profit. Their primary objective is to serve the public, and they may include charities, religious organizations, educational institutions, and social welfare organizations.
Accounts prepared by non-profit organizations
Non-profit organizations prepare various accounts to keep track of their financial transactions and to ensure that their operations are transparent. The following are the main accounts prepared by non-profit organizations:
1. Balance sheet: A balance sheet is a statement that shows the financial position of a non-profit organization at a specific point in time. It includes the organization's assets, liabilities, and net assets (or fund balances).
2. Income and expenditure account: This account shows the organization's income and expenditure for a specific period, usually a year. It includes all the revenue earned by the organization and all the expenses incurred during the period.
3. Receipt and payment account: This account records all the cash transactions of the organization during a specific period. It includes all the cash receipts and payments made by the organization.
Accounts not prepared by non-profit organizations
Although non-profit organizations prepare various accounts to track their financial transactions, they do not prepare an income statement. The reason for this is that non-profit organizations do not have a profit motive, and therefore, their financial performance cannot be measured in terms of profit or loss.
Conclusion
In summary, non-profit organizations prepare various accounts, including a balance sheet, income and expenditure account, and receipt and payment account. However, they do not prepare an income statement as they do not have a profit motive.
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Non-profit organizationsprepare all of the following accounts except thea)Balance sheetb)Income statementc)Income and expenditure accountd)Receipt and payment accountCorrect answer is option 'B'. Can you explain this answer?
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