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ACCOUNTING FOR NON PROFIT ORGANIZATION

By : Wan Maimunah Wan Ishak Commerce Dept Tel : 09-5655300 ext 436. ACCOUNTING FOR NON PROFIT ORGANIZATION. At the end of this chapter, students should be able to : Understand the non profit organization Identify receipts and expenditure of NPO Understand special activities run by NPO

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ACCOUNTING FOR NON PROFIT ORGANIZATION

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  1. By : Wan Maimunah Wan Ishak Commerce Dept Tel : 09-5655300 ext 436 ACCOUNTING FOR NON PROFIT ORGANIZATION

  2. At the end of this chapter, students should be able to : • Understand the non profit organization • Identify receipts and expenditure of NPO • Understand special activities run by NPO • Produce accounting records for NPO

  3. What is Non Profit Organization ? • Club & Society • Main purpose : to provide facilities to the members ( not profit making) • Example : ?? • Recommendation : Refer to some website of any club & society in Malaysia to have some overview of activities of any club & society

  4. Cont : • Financial statement need to be presented in AGM • Items of Financial Statement : • Revenue & Payment Account • Income & Expenditure Account • Balance Sheet

  5. Items of Financial Statement :

  6. Items of Financial Statement : cont

  7. Example :

  8. Example :

  9. Receipts & Payment Account - to show cash in inflow & cash outflow- Similar to cash book in businesses- refer example 4.3 pg 112Receipts and Payment Account for the Year Ended 31 Dec 20XX

  10. Income & Expenditure Account - Capital revenue & capital expenditure WILL NOT be recorded in I&E Ac- Similar to P&L in businesses- refer example 4.4 pg 113Income & Expenditure account for the Year Ended 31 Dec 20XX

  11. Fee Account - Fee – main sources of income for a club/society- Need to be adjusted Fee A/c I&E – revenue item BS – current liability BS – current asset

  12. Exercise : Preparing fee a/c

  13. Exercise : Preparing fee a/c

  14. Enhance your understanding : Question 1 :Info. Of Recreation Club as at 31 Mac 2009 :Summary of Receipts & Payments :Receipts :Ticket sales 2,650Membership Fee 1,200Whole Life Fee 850Profit on sale 315Payments :Purchase of equipment ( 1 August 2008) 600Rent 300Printing & Stationery 120Organizer’s expenses 160Maintenance Expenses 60Security Guard 520Miscellaneous expenses 55

  15. cont : Additional info :1. Opening Balance of cash RM 1802. Opening balance of equipment ( 1 April 2008) RM 5003. Unearned as at 31 Mac 2009 RM 4004. Whole Life Fee will be apportioned as income in 5 years5. Depreciation expenses for equipment 20% 6. Prepaid rent as at 31 Mac 2009 is RM 607. Printing expenses are accrued as at 31 Mac 2009 for RM 30Prepare :a). Fee Accountb). Income & Expenditure fye 31 Mac 2009c). Balance Sheet

  16. Check your answer : Fee A/cUnearned b/f - Advance b/f -Income & Expenditure 1600 Cash 1200Advance c/f - Unearned c/f 400

  17. Income & Expenditure A/c fye 31/3/ Rent 240 Profit from sales 315 Printing & Stationery 150 Ticket sales 2650 Organizer’s expenses 160 Fee 1600 Maintenance 60Whole life fee 170 Salaries 520 Misc 55 Depre-equipment180 Surplus3370 47354735 Solution : How did this figure derived ??

  18. Balance Sheet as at ……….. Non Current Asset : Equipment 1100 Accu. Depre(180) 920 Current Asset : Unearned fee 400 Prepaid rent 60 Cash 3380 3840 Current Liab : Printing (30) 3810 4730 Solution :

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