ACCOUNTING SYSTEM IN NON-PROFIT ORGANIZATIONS
Non profit organizations like business entities are also large, medium and small in size. A large organization will be having a complete accounting system along with a full fledge accounts department where the double entry accounting will be followed whereas, medium or small sized non profit organization will be maintaining few books of accounts and will not be having proper accounting system.
Small size non-profit organization
We can observe so many examples of small size non-profit organizations around us, the very commonly understood example will be of a street library where cash book would have been maintained as the only book of account and finally a summary of that cash book is prepared at the end of the year just to have an overview of the total receipts and payment made during the year.
Large size non-profit organization
On the contrary, member of the large size organization will be interested in all financial results of the entity and a proper book-keeping system is developed over there. The outcome of which is production of a Trial Balance which is used to prepare Income & Expenditure Account and Balance Sheet.
Medium size non-profit organization
Medium size non-profit organizations although do not organize appropriate books of accounts but need to know the financial status in terms of surplus income and financial position of the organization. For this purpose; rules of conversion of single entry into the double entry are followed and finally Income & Expenditure Account and Balance Sheet is prepared.
Non profit organizations like business entities are also large, medium and small in size. A large organization will be having a complete accounting system along with a full fledge accounts department where the double entry accounting will be followed whereas, medium or small sized non profit organization will be maintaining few books of accounts and will not be having proper accounting system.
Small size non-profit organization
We can observe so many examples of small size non-profit organizations around us, the very commonly understood example will be of a street library where cash book would have been maintained as the only book of account and finally a summary of that cash book is prepared at the end of the year just to have an overview of the total receipts and payment made during the year.
Large size non-profit organization
On the contrary, member of the large size organization will be interested in all financial results of the entity and a proper book-keeping system is developed over there. The outcome of which is production of a Trial Balance which is used to prepare Income & Expenditure Account and Balance Sheet.
Medium size non-profit organization
Medium size non-profit organizations although do not organize appropriate books of accounts but need to know the financial status in terms of surplus income and financial position of the organization. For this purpose; rules of conversion of single entry into the double entry are followed and finally Income & Expenditure Account and Balance Sheet is prepared.
