What is the primary purpose of a non-profit organization?

To provide services to society or its members rather than generating profit for owners or shareholders.

Fill in the blanks: A Receipts and Payments Account is a summary of cash ___ and ___ without the date column.

Receipts; payments

True or False: The Income and Expenditure Account for non-profit organizations is similar to the Profit and Loss Account but includes only cash transactions.

False. It includes both cash and non-cash items.

What distinguishes a surplus from a deficit in the context of an Income and Expenditure Account?

A surplus occurs when income exceeds expenditure, while a deficit occurs when expenditure exceeds income.

Fill in the blank: The surplus or deficit from the Income and Expenditure Account affects the ___ fund of a non-profit organization.

Capital

What is the role of fund accounting in non-profit organizations?

Fund accounting tracks and manages funds raised for specific purposes, ensuring transparency and accountability in the use of donations.

True or False: Donations received for capital expenditure should be included in the Income and Expenditure Account as regular income.

False. They should be either capitalized or credited to a special fund account based on the donor's intention.

Riddle: I reflect liabilities and assets on a specific date and show the financial position of an organization. What am I?

The Balance Sheet.

Identify one main source of income for educational institutions.

Tuition fees.

What adjustment is necessary when preparing the Income and Expenditure Account from the Receipts and Payments Account?

Accruals or outstanding amounts must be accounted for to reflect the actual income and expenses for the period.

What should be done with life membership fees in the context of a non-profit organization's accounting?

They should be treated as capital receipts and added to the Capital Fund.