Accounting for Non-Trading Concerns
Definition and Explanation of Non-trading Concerns:
Individuals or institutions with activities other than trade are known as non-trading concerns. Examples of non-trading concerns are clubs, hospitals, libraries, colleges, athletic clubs etc.
These institutions are started not for carrying on a business and making a profit but for some charitable, religious or similar purpose. Their income, which is derived from donations, subscriptions, entrances fees etc., is spent on the objects for which they are started.
Final Accounts of Non-Trading Concerns:
Non-trading concerns usually maintain their accounts by the double entry system and periodically prepare their final accounts for the submission to their members and subscribers. The method of preparing final accounts by non trading concerns is different than trading concerns. Click here to read full article.
Receipt and Payment Account:
Receipt and payment account is a mere summary of cash book for a year. It begins with the cash in hand at the commencement and ends with that at the close of the year. Similarly to cash account, in receipts and payments account receipts are shown on the debit side while payments are shown on the credit side. Click here to read full article.
Income and expenditure account:
Income and expenditure account is merely another name for profit and loss account. Such type of profit and loss account is generally adopted by non trading concerns like clubs, societies, hospitals, and like etc. This account is credited with all earnings (both realized and unrealized) and debited with all expenses (both paid and unpaid) The difference represents a surplus of deficiency for a given period which is carried to the capital account. It should be noted that items of receipts or payments of capital nature such as legacies, purchases or sales of any fixed assets must not be included in this account. Click here to read full article.
Difference Between Receipts and Payments and Income and Expenditures Account