Accounting For Non-Trading Concerns ( Part 1)
Unlike a normal trading concern, non trading concerns like clubs, societies and association are incorporated without the motive of making profits.
Their main objective is to promote amongst its members recreational interest.
However, some clubs and societies which run bars or restaurant for the convenient of the member on a permanent basis with the intention of profit making.
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The following contrast a Trading and Non-trading concern:
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Trading Concern |
Non-Trading Concern |
|
Profit-motive |
Normally non profit motive |
|
Sources of Income mainly related to clubs, societies and associations ( discussed below) |
The incomes derived mainly from the trading in the buying and selling of goods and services |
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Maintain Cash Book |
Here, it is called Receipts and Payments Account |
|
Maintain a Profit & Loss Account |
It is called Income and Expenditure Account |
|
The word Capital is used |
Here, instead of using Capital, it is called Accumulated Fund |
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