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Not for profit Organization

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Receipt & payment account

Real Account
Based upon cash basis of Accounting
Debit side records the cash received during the year
credit side records the cash paid during the year

Income & expenditure Account

Nominal Account
Based upon Matching concept of Accounting
Debit side records the expenses incurred during the year
credit side records the income earned during the year
Income and Expenditure Account is akin to Profit and Loss Account.
The Not-for-Profit Organisations usually prepare the Income and Expenditure Account and a Balance Sheet with the help of Receipt and Payment Account.
Based upon accrual basis of accounting
However, this does not imply that they do not make a trial balance.

Salaries paid during the year – Rs. 28,000

(including Rs. 3,000 for the previous year)

Outstanding at the end – Rs. 1,000

Particular

Details

Amount

Total salaries paid during the year

Add: Outstanding at the end

Less: outstanding in the beginning

(or accrual amount paid for last year)

Add: Advance paid in the previous year

Less: Advance paid for the salaries in the current year

28000

1000

(3000)

Salaries as per Income & expenditure account

26,000

Income and Expenditure Account

Expenditure

Amount

Income

Amount

Expenses account(e, g, salary):

Total salaries paid during the year xxxxx

Add: Outstanding at the end xxxxx

Less: outstanding in the beginning xxxxx (or accrual amount paid for last year)

Add: Advance paid in the previous year

xxxxx

Less: Advance paid for the salaries in the current year xxxxx

Salary of the year

Expenses on consumable materials:

(e.g., stationery)

Opening stock of stationary xxxx

Add: Purchases during the year xxxx

Less: Creditors for stationery in the beginning xxxx

Add: Creditors for stationery at the end xxxx

Add: Advance payments for stationery last year xxxx

Less: Advance payments for stationery in the current year xxxxx

Less: Stock of stationery at the end

xxxxx

Stationery actually consumed

Loss on the sale of an asset:

Book value of the asset

Less: Sale price Net loss on sale Other expenses and losses after necessary adjustments

Expenses for specific purpose

(e.g., cinema shows)

Expenses paid xxxxx

Less: Collection xxxxx

Net expenses of specific item Depreciation

Excess of Income over Expenditure to be added to Capital Fund in the Balance Sheet (Balancing Figure)

Income Account:

(e.g., subscriptions)

Total amount of subscriptions received during the year xxxxx

Add: Outstanding at the end

Less: outstanding in the beginning

xxxxx

(or actual amount of last year received this year)

Add: Advance received last year

xxxxx

Less: Advance received this year

xxxxx

Current Income:

Profit on sale of asset :

Sale price of the asset xxxxx

Less: Book value of the asset sold

xxxxx _______

Net profit on sale

Receipts for specific items xxxx

(Cinema shows)

Less: Amount spent xxxx

Net Income on specific item:

Other income and gains with adjustments

Excess of Expenditure over Income to be deducted from the Capital Fund in the Balance Sheet (Balancing Figure)

Purchase of books is a part of ???

Books are Capital Expenditure hence booked in balance sheet as an asset

Subscription Account

Particular

Amount

Particular

Amount

To Balance b/d

(Out. at the beg)

To Income & Expenditure A/c

(bal. fig.)

To Balance c/d

(Adv. at the end)

By Balance b/d

(Adv. at the beg)

By Cash A/c

(Sub. received during the year)

By Bad debts(if any)

By Balance c/d

(Out. At the end)

Statement showing calculation of subscription

Particular

Amount

Total Subscription received during the year(whether relates to any year)

Less: Subscription o/s at the beg. Of current year

Less: Advance Subscription received during the current year

(relates to any future period)

Add: O/s Subscription at the end of current year

(including sub. o/s for p/y year till the end of current year)

Add: O/s Subscription received in advance at the end of current year

Subscription to be shown in income and expenditure a/c

INCOME & EXPENDITURE ACCOUNT-

Consider the following items not appearing in the Receipt and Payment Account that need to be taken into account for determining the surplus/ deficit for the current year :

(a) Depreciation of fixed assets.

(b) Provision for doubtful debts, if required.

(c) Profit or loss on sale of fixed assets

From the following information, calculate amount of subscriptions to be credited to the Income and Expenditure Account for the year ended 31st March, 2019:

		?
1st April, 2018	Subscriptions in Arrears	50,000
	Subscriptions Received in Advance	30,000
31st March, 2019	Subscriptions in Arrears	25,000
	Subscriptions Received in Advance	70,000