Non-Trading Concerns – Its Financial Statements ( Part 3)

August 13th, 2006 Comments off
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This article explained what’s are the financial statements of a non-trading concern:

What are the Financial Statement of A Non-Trading Concern:

 

They are the following:

 

· Receipts and Payments Account;

· Income and Expenditure Account ( also includes the Trading account if it runs restaurant or bar)

· A Balance Sheet if it has other assets beside Cash

 

 

 

 

Tabulated below the difference between the Receipts and Payments Accounts and the Income and Expenditure Accounts:

Receipts & Payments A/c

Income And Expenditure A/c

Is equivalent to the Cash Book of a trading concern.

Summary of all revenue income earned and all revenue expenditure incurred in the current year, the balance being surplus or deficit.

Contains both revenue and capital items

Only revenue items are included.

Contains the part actually received or paid plus items relating to preceding or succeeding periods

Also based on accrual basis where all income and revenue expenditures attributable to the current period are included.

If positive bank balance then include as Current Assets in the Balance Sheet otherwise as overdraft classified under Current Liability

If surplus balance is added to the Accumulated Fund in the Balance Sheet. Vice versa, if deficit, to deduct from Accumulated Fund in the Balance Sheet.

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