Accounting For Non-Trading Concerns ( Part 2)
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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