Accounts Of Not-for-profit-making Organizations
Akopọ
Welcome to the course material overview on Accounts of Not-for-profit-making Organizations. In this section of Financial Accounting, we delve into the unique accounting practices specific to organizations that operate for purposes other than earning a profit.
Unlike for-profit entities, not-for-profit organizations aim to achieve goals that benefit society or specific causes without the primary intention of making money. Understanding the accounts of these organizations is vital for stakeholders, regulators, and the organizations themselves to ensure transparency and accountability in financial reporting.
Objectives: This course material aims to equip you with the knowledge and skills needed to distinguish the features of not-for-profit-making organizations, compute subscription income, analyze cash balances, and prepare financial statements accurately.
Development of Accounting: Before delving into the specifics of not-for-profit accounts, it is crucial to understand the broader principles, concepts, and conventions of accounting. Accounting serves as the language of business, facilitating communication of financial information to various stakeholders.
Users and Characteristics of Accounting Information: In the context of not-for-profit organizations, the users of accounting information include donors, government agencies, members, and the general public. The characteristics of accounting information in this sector are tailored to demonstrate the organization's stewardship of resources and impact on its mission.
Role of Accounting Records and Information: Accounting records play a pivotal role in tracking financial transactions, ensuring compliance with regulations, and providing insights for decision-making. The functions of source documents, such as receipts and invoices, are essential for maintaining an accurate financial record.
Receipts and Payments Account: One of the primary financial statements prepared by not-for-profit organizations is the receipts and payments account. This statement summarizes all cash inflows and outflows during a specific period, providing a snapshot of the organization's liquidity position.
Income and Expenditure Account: The income and expenditure account focuses on the organization's revenues and expenses, similar to the profit and loss account in for-profit entities. It helps stakeholders understand the financial performance and sustainability of the organization.
Statement of Financial Position (Balance Sheet): The balance sheet of a not-for-profit organization reflects its financial position at a specific point in time, showcasing its assets, liabilities, and net assets. It provides a comprehensive view of the organization's resources and obligations.
As you progress through this course material, you will explore various accounting techniques, adjustments, and reporting requirements specific to not-for-profit organizations. By mastering these concepts, you will be equipped to analyze and interpret financial information accurately in the context of organizations driven by social or charitable objectives.
Awọn Afojusun
- Compute the Cash Balances and Accumulated Funds, Surplus and Deficit for the Period from All Sources
- Prepare Statement of Financial Position (Balance Sheet)
- Prepare Receipts and Payments Account
- Distinguish Between the Features of Not-for-Profit-Making Organizations
- Determine the Subscription Income, Subscription in Arrears and in Advance
- Prepare Income and Expenditure Account
Akọ̀wé Ẹ̀kọ́
Ìdánwò Ẹ̀kọ́
Oriire fun ipari ẹkọ lori Accounts Of Not-for-profit-making Organizations. Ni bayi ti o ti ṣawari naa awọn imọran bọtini ati awọn imọran, o to akoko lati fi imọ rẹ si idanwo. Ẹka yii nfunni ni ọpọlọpọ awọn adaṣe awọn ibeere ti a ṣe lati fun oye rẹ lokun ati ṣe iranlọwọ fun ọ lati ṣe iwọn oye ohun elo naa.
Iwọ yoo pade adalu awọn iru ibeere, pẹlu awọn ibeere olumulo pupọ, awọn ibeere idahun kukuru, ati awọn ibeere iwe kikọ. Gbogbo ibeere kọọkan ni a ṣe pẹlu iṣaro lati ṣe ayẹwo awọn ẹya oriṣiriṣi ti imọ rẹ ati awọn ogbon ironu pataki.
Lo ise abala yii gege bi anfaani lati mu oye re lori koko-ọrọ naa lagbara ati lati ṣe idanimọ eyikeyi agbegbe ti o le nilo afikun ikẹkọ. Maṣe jẹ ki awọn italaya eyikeyi ti o ba pade da ọ lójú; dipo, wo wọn gẹgẹ bi awọn anfaani fun idagbasoke ati ilọsiwaju.
- What is the primary financial statement prepared by not-for-profit-making organizations to report their financial performance and activities? A. Balance Sheet B. Income Statement C. Cash Flow Statement D. Statement of Financial Position Answer: B. Income Statement
- How are donations typically classified in the accounts of not-for-profit-making organizations? A. Revenue B. Liabilities C. Equity D. Assets Answer: A. Revenue
- Which of the following accounts would not be commonly found in the books of not-for-profit-making organizations? A. Sales Revenue B. Program Expenses C. Membership Dues D. Loan Payable Answer: A. Sales Revenue
- What is the term used to describe the excess of revenue over expenses in not-for-profit-making organizations? A. Profit B. Surplus C. Equity D. Dividends Answer: B. Surplus
- Which of the following represents a common source of revenue for not-for-profit-making organizations? A. Dividends B. Sale of Goods C. Fundraising Activities D. Interest Income Answer: C. Fundraising Activities
- How are funds typically categorized in the financial statements of not-for-profit-making organizations? A. Restricted and Unrestricted B. Fixed and Variable C. Current and Non-current D. Income and Expenses Answer: A. Restricted and Unrestricted
- Which financial statement of not-for-profit-making organizations is similar to the income statement of for-profit entities? A. Statement of Financial Position B. Statement of Cash Flows C. Statement of Activities D. Statement of Changes in Equity Answer: C. Statement of Activities
- In not-for-profit-making organizations, what is the purpose of the statement of financial position? A. To show the organization's cash flows B. To display the surplus or deficit for the period C. To report the organization's financial position at a specific point in time D. To present the organization's revenue and expenses Answer: C. To report the organization's financial position at a specific point in time
- What is the term used to describe the regular fees paid to become a member of a not-for-profit-making organization? A. Subscriptions B. Donations C. Sponsorship D. Grants Answer: A. Subscriptions
- Which type of account would be credited when a not-for-profit-making organization receives a donation? A. Revenue B. Expenses C. Asset D. Liability Answer: A. Revenue
Awọn Iwe Itọsọna Ti a Gba Nimọran
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Financial Accounting for Not-for-profit Organizations
Atunkọ
Comprehensive Guide to Accounting for NPOs
Olùtẹ̀jáde
Major Publishing House
Odún
2020
ISBN
978-1-12345-678-9
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|---|---|
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Accounting for Government and Not-for-Profit Entities
Atunkọ
Fundamentals and Best Practices
Olùtẹ̀jáde
Top Accounting Publications
Odún
2019
ISBN
978-1-54321-098-7
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Àwọn Ìbéèrè Tó Ti Kọjá
Ṣe o n ronu ohun ti awọn ibeere atijọ fun koko-ọrọ yii dabi? Eyi ni nọmba awọn ibeere nipa Accounts Of Not-for-profit-making Organizations lati awọn ọdun ti o kọja.
Ibeere 1 Ìròyìn
It is the tradition of the club to write off an amount equal to 25% of the subscriptions received as other expenses.
What is the amount to be written off as other expenses?
Ibeere 1 Ìròyìn
Use the following information to answer the question that follows
N
Direct material used-----------------64,000
Direct labour--------------------------30,000
Production overheads--------------22,000
Work-in-progress at beginning-----9,000
Work-in-progress at close---------14,000
Prime cost of production is?