Principles of AccountsPrinciples of Accounts

Chapter 34Chapter 34

Receipts and Payments Accounts Receipts and Payments Accounts and and

Income and Expenditure Income and Expenditure Accounts Accounts

Introduction

Non-profit making organizations

Non-profit making

Provide services to members

Except sale of food and drinks Profits

No distribution of profits tomembers

Sources of income

Can you name some of the examples ?

Then, what are the examples of expenditures in a non-profit making organization ?

Incomes :1. Donations2. Subsidy3. Income from fund

raising activities4. Subscriptions5. Membership fees6. Entrance fees7. Bar profit8. …………………

Expenditures :1. Stationery2. Sundry expenses3. Printing

4. Staff wages5. Depreciation of FA6. Rent and rates7. Telephone bills8. ………………….

Accounting Terms

Trading Firms :

1. Capital2. Cash Book

3. Profit and Loss Account

4. Net Profit

5. Net Loss

Non-profit Making Organizations :

1. Accumulated Fund2. Receipts and Payments

Account3. Income and Expenditure

Account4. Surplus of income over

expenditure / Surplus5. Excess of expenditure

over income / Deficit

Receipts and Payments Accountsa summary of bank and cash transactionsthe 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 AccountReceiptsOpening bank balanceOpening cash balanceList of receipt items

PaymentsList of payment itemsClosing bank balanceClosing cash balance

Deficiency of Receipts and Payments Account

1. It fails to reveal the performance of non- trading 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 2004Income : $ $

Bar profit 8 000Subscriptions received 10 000Life membership fees received 20 000 38 000

Less : ExpenditureRent and rates 10 000Stationery 900Provision for depreciation--- fixtures and fittings 1 100 12 000

Surplus of income over expenditure 36 000

Excellent Golf Club Balance sheet as at 31 October 2004

Fixed Assets $ $ $Fixtures and fittings 11 000Less : Provision for depreciation 1 100 9 900

Current AssetsBar stock 1 500Prepaid expenses 200Cash at bank 40 000 41 700

Less : Current LiabilitiesBar creditors 1 000

Net Current Assets 40 70050 600

( to be continued )

( to be continued )

Accumulated Fund $Balance as at 1 November 2003 10 000Add : Excess of income over expenditure 36 000

46 000Life 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 affairs2. Bar Trading Account3. Income and

Expenditure Account4. Balance Sheet

Notes Notes ：： Example 1 !!!!!!!Example 1 !!!!!!!

Wish you great success !!!!!!!

THE ENDTHE END

THANK YOU!THANK YOU!