Accounting For Non-Trading Concerns ( Part 2)

August 13th, 2006 Comments off
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This article explained what’s normally is the sources and expenditure of a non-trading concern.

Sources of Income In a Non-Trading Concern

Revenue in nature:

·  Entrance fees;

·  Subscriptions;

· Interest from investment;

· Visitors fees;

· Lockers fees;

· Gross trading profit from bar or restaurant;

· Refreshment receipts;

· Donations;

 

Capital in nature

 

· Legacies;

· Donations ( if stated for capital purpose like building a swimming pool)

 

Salient point:

 

·      Only the revenue income are included in the Income & Expenditure Account ( Profit & Loss A/c for a trading concern) to determine the “ Surplus” or “Deficit” for the current year activities ( contrast with the trading concern – profit or loss for the current year )

 

Types of Normal Expenditure in a Non-Trading Concern

·   Rent for club/association building;

·   Staff wages;

·   Maintenance costs of club/association;

·   Honorarium;

·   Insurance, printing and others

 

Capital expenditures like:

Fixed assets

 

Salient point:

Purchases of fixed assets cannot be taken up in the Income and Expenditure account only the depreciation of the fixed asset is permitted.

 

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Financial Accounting

 
 

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