1. Advanced Financial Accounting FIN-611 Main Ahmad Farhan Lecture-6 Non-Profit organizations

2. Non-Profit Organizations 1. Which is maintaining proper books of accounts and follows double entry accounting system. 2. Which is not maintaining proper books of accounts and not follow double entry accounting system.

3. Organizations that follows no proper Accounting system Small Size Medium Size

4. Library Receipt and payment Account For the year ended 31 st Dec, 2008 ReceiptsCashBankPaymentsCashBank Opening balance Subscription received Membership fee Donations Loan received Any other income xxx ---- xxx Telephone bill Rent Salaries Entertainment expenses News paper & Periodicals Any other expenses Closing balance xxx ---- xxx ---- xxx ---- xxx

5. Preparation of Income Statement 1. Function of expense method 2. Nature of expense method

6. Income statement under Function of expense method Salesxxx Less Cost of goods sold xxx Gross profitxxx Less Operating expenses Administrativexxx Selling and marketing xxx xxx Profit from operationsxxx Add other income xxx Profit before taxxxx Less Income Taxxxx Profit after taxxxx

7. Function of Expenses 1. Cost of goods sold 2. Administrative expenses 3. Selling and Distribution expenses 4. Financial expenses 5. Income tax expenses

8. 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

9. Income & Expenses Account IncomeAmountExpenditureAmount Subscription income xxx Membership fee xxx Entrance fee xxx xxx Salaries Entrance fee Electricity bill Building rent Excess of Income Over Expenditure /surplus xxx