Principles of Accounts

Chapter 34
Receipts and Payments Accounts
and
Income and Expenditure
Accounts

Introduction
Non-profit
making
organizations

Non-profit
making
Except sale
of food and
drinks
No
distribution
of profits to
members

Provide
services to
members

Profits

Sources of income

Can you name some of the examples ?

Then, what are the examples of

expenditures in a non-profit making
organization ?

 Incomes :

Expenditures :

1. Donations
2. Subsidy
3. Income from fund
raising activities
4. Subscriptions
5. Membership fees
6. Entrance fees
7. Bar profit
8.

1. Stationery
2. Sundry expenses
3. Printing
4.
5.
6.
7.
8.

Staff wages
Depreciation of FA
Rent and rates
Telephone bills
.

Accounting Terms
Trading Firms :

Non-profit Making
Organizations :

1.
2.

Capital
Cash Book

1.
2.

3.

Profit and Loss Account

3.

4.

Net Profit

5. Net Loss

4.
5.

Accumulated Fund
Receipts and Payments
Account
Income and Expenditure
Account
Surplus of income over
expenditure / Surplus
Excess of expenditure
over income / Deficit

Receipts and Payments Accounts

a summary of bank
and cash transactions
the balance at the
beginning and the end
of the period
represents the amount
of cash in hand and at
bank or bank
overdraft
not a ledger account

Receipts and Payments Account

Receipts
Opening bank balance
Opening cash balance
List of receipt items

Payments
List of payment items
Closing bank balance
Closing cash balance

Deficiency of Receipts and Payments Account

1. It fails to reveal the
performance of nontrading organizations
during an accounting
period.
2. In order to reflect its
performance during
a period, a different
form of financial
statements is
required. ???????

Excellent Golf Club

Income and Expenditure Account
for the year ended 31 October 2004
Income :
$
Bar profit
8 000
Subscriptions received
10 000
Life membership fees received 20 000

38 000

Less : Expenditure
Rent and rates
10 000
Stationery
900
Provision for depreciation
--- fixtures and fittings
1 100
Surplus of income over expenditure

12 000
36 000

Excellent Golf Club

Balance sheet as at 31 October 2004
Fixed Assets
Fixtures and fittings
Less : Provision for depreciation
Current Assets
Bar stock
Prepaid expenses
Cash at bank
Less : Current Liabilities
Bar creditors
Net Current Assets
( to be continued )

1 500
200
40 000

$
11 000
1 100

$
9 900

41 700

1 000
40 700
50 600

( to be continued )
Accumulated Fund
Balance as at 1 November 2003
Add : Excess of income over expenditure

$
10 000
36 000
46 000

Life membership fees

4 600
50 600

Do you understand the basic

accounting practice for the
non-profit making organizations ?

Summary of accounting procedures

?

Summary of accounting procedures

?

?
Summary of accounting
procedures
?

Steps :
1. Statement of affairs
2. Bar Trading Account
3. Income and
Expenditure Account
4. Balance Sheet

Notes
Example 1 !!!!!!!

Wish you great

success !!!!!!!

THE END
THANK YOU!