Advanced financial accounting - Lecture 6: Non-Profit organizations

Advanced financial accounting - Lecture 6: Non-Profit organizations. The main topics covered in this chapter include: organizations that follows no proper accounting system; library receipt and payment account; preparation of income statement; function of expense method; nature of expense method;... Please refer to the lecture for details!

Advanced Financial  Accounting FIN­611   Main Ahmad Farhan  Lecture­6 Non­Profit organizations      Non­Profit Organizations     Which  is  maintaining  proper  books  of  accounts and follows double entry accounting  system Which  is  not  maintaining  proper  books  of  accounts  and  not  follow  double  entry  accounting system Organizations that follows no proper Accounting system   Small Size Medium  Size Library Receipt and payment Account  For the year ended 31st Dec, 2008  Receipts  Cash  Bank Payments  Opening balance Subscription received  Membership fee Donations  Loan received  Any other income     xxx xxx xxx xxx ­­­­ xxx xxx xxx xxx xxx xxx xxx xxx Telephone bill Rent  Salaries  Entertainment  expenses News paper &  Periodicals  Any other  expenses  Closing balance  Cash  Bank  xxx ­­­­ xxx ­­­­ xxx ­­­­ xxx ­­­­ xxx xxx xxx ­­­­ xxx xxx xxx xxx Preparation of Income Statement  Function of expense method  Nature of expense method  Income statement under  Function of expense method  Sales Less Cost of goods sold           Gross profit Less Operating expenses  Administrative Selling and marketing  Profit from operations Add other income  Profit before tax Less Income Tax Profit after tax xxx xxx xxx xxx xxx xxx xxx xxx   xxx xxx xxx         Function of Expenses  Cost of goods sold  Administrative expenses  Selling and Distribution expenses  Financial expenses Income tax expenses  Income & Expenses Account   Income Subscription income   xxx  Membership fee   xxx Entrance fee    xxx Total income  xxx Expenses Salaries      xxx Entrance fee     xxx Electricity bill     xxx Building rent     xxx Total expenses      xxx Excess of Income over  Expenditure/surplus   xxx  Income & Expenses Account   Income Amount Subscription income   xxx  Membership fee         xxx Entrance fee          xxx   xxx Expenditure Salaries  Entrance fee Electricity bill Building rent Amount                      xxx xxx xxx xxx Excess of Income Over Expenditure /surplus   xxx xxx xxx ... maintaining  proper  books  of  accounts  and  not  follow  double  entry  accounting? ?system Organizations? ?that follows no proper? ?Accounting? ?system   Small Size Medium  Size Library Receipt and payment Account ...Non­Profit? ?Organizations? ?    Which  is  maintaining  proper  books  of  accounts and follows double entry? ?accounting? ? system Which  is  not  maintaining ... Function of Expenses  Cost of goods sold  Administrative expenses  Selling and Distribution expenses  Financial? ?expenses Income tax expenses  Income & Expenses Account   Income Subscription income   xxx