FS of Non Profit Organisation Test - 7

Subscription to be shown on the income and expenditure side = Subscription received + Subscription receivable at the end of year - Subscription of the previous year

Subscription to be shwon on income and expenditure side = 10,000+1,000-2,000 = Rs. 9,000

Amount of stationery to be shown in income and expenditure on Expendtiure side (Dr. Side) = amount paid for stationery + stock at the beginning of the year + outstanding creditors at the end of year  - outstanding creditors at the beginning of the year - stock at the end of year

Amount to be shown in income and expenditure = 21600 + 6000 +2600-1000 -4000 =Rs. 25200

Receipt and payment account is summary of cash book and cash is an asset . Real Rule applies on assets. Hence Receipt and payment account is also Real account.

Amount to be debited to income and expenditure as Sports material consumption= Amount paid + Opening Stock -closing stock - opening creditors + Closing creditors

Amount to be debited to income and expenditure= 19000+7500-6400-2000+2600= Rs. 20,700 

Endowment fund is a gift received by NPO as specify by donor or trustee to use this fund to specifi purpose thus it is capital receipt which is to be shown oj liability side of balance sheet because it provide permanent income to institution. 

Now, in this case, Amount of endowment fund is having specific condition to use for recreational activity Which amounting to Rs.10,00,000 And this will be the permanentaly restricted contribution for the current year.

Subscription during the year = subcription received + advance subscription at the beginning - advance subscription at the end - outstanding subscription at the beginning - outstanding subscription at the end

Subscription during the year = 15000+2500-3000-6000+4000

Subscription during the year - Rs. 12500

The conservatism/prudence concept is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received as. Hence Stock is valued on this basis as lower of cost or NRV.

There was Endowment fund of Rs. 20,00,000 received as a gift which is to be invested in prepetuity and when investment purchased Rs. 40,000 this will be out of endowment fund. Hence the balance amount will be :- 20,00,000-40,000=19,60,000 Rs. But at the end of first year the fair value of fund is Rs. 20,10,000 Which means it increase Rs. 50,000 (20,10,000-19,60,000) .

income and expenditure account is prepared by non trading concern. Non trading concern are like NPO which do not have any profit motive and only provide services so they don't prepare any manufacturing or profit and loss account instead they prepare income and expenditure account.

income and expenditure account shows the item which are recurring in nature means revenue nature, the capital nature items are to be shown in the balance sheet. 

Subscription at the end of the year is an assets which is to be shown in the balance side and with that it to be added to subscription in income and expenditure account.

we can calculate susbcription by :- Susbcription Received during year + outstanding Subscription at the end -outstanding subscription at the beginning of the year

Income and expenditure account records income and expenditure,when income exceeds expenditure there will be surplus and if expenditure is more than income there will be deficit.

-if the amount in tournament fund and tournament income is greater than the amount of tournament expense then amount is to be shown on liability side of balance sheet.

-if the amount in tournament fund and tournament income is less than the amount of tournament expense then amount is to be shown on Dr. side of income and expenditure as expense.

So, it can be recorded in both income and expenditure but depends on situation that may arise.

A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. Hence, it is to be recorded in to Footnotes , Not in to accounts.

These are the fees collected from every member at the time of his admission into membership. It is paid only once by the new entrants on becoming a member of a society or a club. 

It is treated in two ways :-

-if It is to be capitalized then it will be shown in to Balance sheet on the liability side.

-If it is to be consider as revenue receipt then show it in to income and expenditure account on the income side.

Hence, Rs. 20% which means Rs. 2000 (10,000*20%) will be shown on the liability side of balance sheet and balance of Rs. 8000  is to be shown in income expenditure account on income side.

Supporting services expenses  are those expense which consists of 1) management and general expenses, and 2) fundraising expenses.

Hence , Total of Rs. Rs. 450000 (Fundraising Rs.250,000, Management and general Rs.200,000 )will be considered as support expense.

Subscription to be shown in income and expenditure account = subscription received+ outsatnding subscription at the end - outstanding subscription at the beginning of year - advance subscription at the end of the year + advance subscription at the beginning of the year

Subscription to be shown in income and expenditure account = 250000+10000-9500-8700+6200= Rs. 248000

Receipt and payment account is summary of cash book. It shows the cash received and payment done. it genrally start with the debit balance of cash and genrally have a debit balance at the year end too. 

At the end of accounting year, there may be some expense which are yet not due but have been paid which is called paid in advance which are to be shown on the assets side of balance sheet. So, wages paid in advance is same like assets if it is given in trial balance and shown in balance sheet.

Outstanding expenses account are those personal account to whom, we have to pay expenses, we have already taken services from them. But still we have not paid them. This is also called liability account because its balance will be shown in liability side of organization’s balance sheet.

Subscription to be shown on the cr. side of income and expenditure account = Subscription received + outstanding subscription at the year end - outstanding subscription at the beginning of the year

Subscription to be shown on the Cr. side of income and expenditure account = 50000+8000-6000= Rs. 52000

Employers contribution to P.F. is part of salary which employer provide to employee every month. It is an expense like salary so it is to be recorded in Profit and loss Account.

Salaries to be shown in income and expenditure = salary paid + advance salary at the beginning of the year + outstanding salary at the end of the year - advance salary at the end of the year -outstanding salary at the beginning of the year

Salaries to be shown in income and expenditure = 10200 + 1200 +750 - 600 - 900 =Rs. 10650

Amount to be debited to income and expenditure = amount paid + opening stock - closing stock

Amount to be debited to income and expenditure= 1500+1000-600

Amount to be debited to income and expenditure= Rs. 1900

Specific donation are provided with restriction for which they can be use like doantion for building to construct building etc. They are in capital nature and to be shown in the balance sheet on the liability side.