Non-Profit Organisations | Problem Solving | Accounting | LetsTute Accountancy

Non-Profit Organisations | Problem Solving | Accounting | LetsTute Accountancy


Hello,
in our previous session we saw what is NPO & its accounting books,
right Now today we are going to apply the knowledge
of accounting to prepare financial statement of
Star sports club And this is a non-profit organisation
They want prepare their financial statement So they came to us with this information
These are the transactions which happened in a year
So, First of all we prepare receipt & payment account to know what are the receipts & payments
and what is cash balance. First we will put opening cash balance
Then will record all the receipts, First there is a subscription
Donations And it is said that 50% of the donation should
be capitalized We will record both the donation here
Because receipt and payment account records both capital & revenue incomes & expenses
Entrance fees Then sale proceeds of newspaper
And the other receipts Let’s record
Yes done Then we have payments
Salary Fixed deposit
There are other Expenses Then we have Furniture purchased
Investment made And finally we got the balance of cash & bank
Now we can proceed to prepare the income & expenditure account with the help of this receipt & payment
account So let’s begin
Let’s first record all the receipts We have subscriptions,
And there is a note that there are some outstanding & prepaid subscriptions
So will add outstanding subscription of current year and will deduct last year’s outstanding
because it has been included in the last year’s subscription amount
And also will deduct prepaid subscription and add the last year’s prepaid subscription
because it has not been included in the last year’s balance sheet
Nothing is difficult here Current year’s outstanding & last year’s prepaid
will be added because the service of the same has been provided in the same year
And last year’s outstanding will get deducted because it has been accrued in the last year
itself And the prepaid of current year will be deducted
because the services for the same has not been provided yet
And the second effect of the same will be in balance sheet,
That to only current year’s outstanding & prepaid not the last years because it has been recorded
already Then we have donations,
so will record here half and other half will in balance sheet
Same way entrance fees also, half will come here and other half will come in the balance
sheet liability side Then we will record the other incomes,
Done Lets move on to the payment side
Same way like subscriptions there are some outstanding and prepaid salary
It will also have the same effect Current year outstanding & last years prepaid
will be added And the last years outstanding & current years
prepaid will be deducted And the second effect of the same will be
in the balance sheet Then the other expenses
Lets check whether we have missed anything ,
Yes in the note there is one more expense which is sport material consumed
Lets record it here Done
Let’s see whether it is surplus or deficit So here the income is more than expenses so
there is a surplus And this will go in the balance sheet
Now Lets finally prepare the balance sheet
Lets record fixed assets Furniture has been purchased
Then land & building Then there are some investments & fixed deposit
Then we have the cash balance from the receipt & payment account
And the prepaid expense & outstanding income Then there is one more
Which is stock of sport material Now how we will get the closing stock of sport
material, here we have opening stock of sports material
and from that we can deduct material consumed this year and the balancing figure will be
the closing stock Let�s record here
Then all the liabilities Other than capital fund there is,
Prize fund Charity fund
And the current liabilities Outstanding expense & prepaid income
Let’s check once again We have fill up all the figures
NO, We have missed capital fund Let’s record it here
Done Now if we check the totals it will tally. See how easy it was
Nothing was different All the accounting treatment & principles
will be same for all type of organizations Be it a joint stock company, sole proprietorship,
partnership, or Non profit organisation So this was all about NPO
We hope you have enjoyed this session. Please hit the like button and do share it
with your friends, post your comments and feedback in the comment box below. Subscribe to the channel if you haven’t already. Till then keep watching and keep learning
Thank you.

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8 thoughts on “Non-Profit Organisations | Problem Solving | Accounting | LetsTute Accountancy

  1. let tute thanks a lot . what a concept of account you have present , even simple men
    can understand what is account , once thanks with 5 *** star for presenting these video in very simple way

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