Non behalf club Accounting

Pump For Sale - Non behalf club Accounting

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Certainly, allowable accounting is primary for non-trading institutions. These concerns maintain, generally, a cash book and later they put in order a summary of cash transactions appearing in the cash book. This summary takes the form of an catalogue known as receipts and payments account.

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Such concerns also put in order 'income and expenditure account' (which is more or less on the lines of profit and loss account) and the balance Sheet.

The day-to-day accounting consists of maintaining.

(i) Cash book for recording receipts and payments, and

(ii) Ledger for classification of transactions under allowable heads.

Receipts and payments account

It is a summary of cash book for a given period, but the Receipts and Payments catalogue shows the totals of cash transactions under distinct heads. All the receipts, be cheque or cash are entered on the debit (receipts) side (as in cash book) whereas all the payments (both by cheque or cash) are shown on the prestige (payments) side. Following features of the receipts and payments catalogue will help to recognize its nature clearly :

1. It is a summary of cash book, like a cash book, receipts are shown on the debit side and
payments on the prestige side.

2. Cash and bank items are merged in one column. That means receipts in cash as-well-as by , cheque are entered in one column on debit and payments in cash as-well-as by cheque are entered in one column on prestige side. Contra entries between cash and bank get eliminated.

3. It is not a part of duplicate entry book-keeping. It is just a summary of cash book which is a , part of duplicate entry system.

4. Just like cash book, it starts with the chance balance of cash and bank and closes with the conclusion balance of cash and bank.

5. Both revenue and capital receipts and payments are recorded in this account. For example, ...An organization that is exclusively set up to carryon with the object of carrying out collective service or promo & organization of collective activities, is a non-trading enterprise. Cost for rent and Cost for construction and machinery both are recorded on its payments side. Similarly, receipts on catalogue of subscription and machinery are shown on the receipts side.

6. Usually, it shows a debit balance which represents cash in hand and at bank. However, in case of bank overdraft, which is larger than cash in hand, the catalogue will show a prestige balance.

7. Receipts and payments catalogue fails to disclose gain or loss made by the concern while the period because (a) it is prepared on actual receipt basis i.e. It records all receipts-irrespective of the period to which it relates (previous year, current year or future), (b) it also ignores the nature of the receipts and payments (whether capital or revenue). I

8. Accounting plan of gain or loss is based on "accrual concept" which by its very nature "receipts and payments account" is not capable of considering. Therefore, fails to disclose gain or loss (earned or suffered by the concern) while the period. For example, this catalogue ignores: !

(i) Decrease or increase i.e. Depreciation or appreciation in the value of assets;

(ii) increase or decrease in the value of stock;

(iii) Provision for expenses incurred but payments not made-outstanding expenses.

(iv) Accounting for Cost in develop for the services to be utilized in the next accounting period-prepaid expenses.
It also fails to distinguish between:

(v) Capital and revenue payments-whether expenditure or buy of an asset, and

(vi) company fee and appropriation- whether company expenditure or drawings.

Limitations of receipts and payments account

Receipts and payments catalogue suffers from following limitations :

(a) It does not show expenses and incomes on accrual basis.

(b) It does not show whether the club or society is able to meet its day-to-day expenses out of its incomes.

(c) It does not show expenses on catalogue of depreciation of assets.

(d) It does not construe the details about many expenses and incomes. In order to construe such questions, treasurer of the club prepares 'Income and expenditure account' and balance sheet.

Income and expenditure account

This catalogue is prepared by non-trading concerns who want to know if while the financial year their revenue has been more than their expenditure i.e. profit or vice versa ( i.e. Loss). Since the object of these concerns is not primarily to' earn profit, therefore, they feel shy in giving it the name of profit and loss account. Because the word 'profit' is a taboo which any society 'looks down upon'. Of course, it discloses whether the involved custom earned or lost.

It is equivalent to and serves the purpose of 'profit and loss account'.

It is prepared on "accrual basis" (not on receipt basis) meaning thereby that all incomes are to be included which have been earned in the relevant period (whether undoubtedly received or not). Similarly, it includes all expenses incurred in the relevant period (whether undoubtedly paid or not). This catalogue serves exactly the purpose which 'profit and loss account' serves in a trading concern. On the pattern of 'profit and loss account' revenue is shown on the prestige side and expenditure on the debit side. It also distinguishes between 'capital & revenue' items i.e. It does not take into notice capital items you will get new knowledge about Pump For Sale. Where you can offer used in your evryday life. And most significantly, your reaction is passed about Pump For Sale.

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