Class 12 Accountancy - HARYANA
Accounting for Not-for-Profit Organisations
The chapter 'Accounting for Not-for-Profit Organisations' introduces students to the financial accounting practices of entities whose main aim is service rather than profit, such as schools, hospitals, and libraries. For Class 12 Haryana (BSEH) board exams, this chapter is crucial as it teaches how to prepare final accounts—specifically the Receipt and Payment Account, Income and Expenditure Account, and Balance Sheet—from incomplete records. Students learn to handle specific items like subscriptions, legacy, entrance fees, and fund-based accounting, which frequently feature in 6-mark practical numerical problems.
Start Learning FreeKey Concepts
Not-for-Profit Organisation (NPO)
An organization set up with the primary objective of providing service to the public rather than earning a profit, such as charitable trusts, clubs, and educational institutions.
Receipt and Payment Account
A summary of cash and bank transactions prepared at the end of the accounting year, serving as a classified summary of the Cash Book.
Income and Expenditure Account
A nominal account prepared by NPOs to find out the surplus or deficit for the accounting period, following the accrual basis of accounting.
Fund-Based Accounting
A specialized accounting method where specific funds (like prize fund or match fund) are created, and all related incomes and expenses are adjusted directly to that fund rather than the Income and Expenditure Account.
Subscription
The periodic contribution made by members of an NPO, which is the main source of recurring income and requires careful adjustment for outstanding and advance amounts.
Important Formulas
Board Exam Info
In the Haryana (BSEH) Class 12 Accountancy board exam, this chapter typically carries around 6 to 8 marks. Questions usually include one short-answer theoretical question (1-2 marks) and one major 6-mark practical question involving the preparation of an Income and Expenditure Account and Balance Sheet from a given Receipt and Payment Account with adjustments.
Frequently Asked Questions
Is Receipt and Payment Account the same as Profit and Loss Account?
No. Receipt and Payment Account is essentially a summary of cash transactions (like a Cash Book) showing all cash receipts and payments of both capital and revenue nature, whereas a Profit and Loss Account records only revenue items on an accrual basis.
How do we treat Entrance Fees in NPO accounts?
As per standard guidelines, unless stated otherwise in the question, entrance fees are treated as revenue receipts and credited to the Income and Expenditure Account. If the question specifies capitalizing them, they are added to the Capital Fund.
Why is a Balance Sheet prepared twice in some NPO problems?
An Opening Balance Sheet is often prepared to calculate the Opening Capital Fund when the opening capital is missing, while the Closing Balance Sheet is prepared to show the financial position of the NPO at the end of the accounting period.
Learn Accounting for Not-for-Profit Organisations with Your AI Tutor
10 different ways to study this chapter. Free for 3 chapters per day.
Lecture
Key Points
Interactive
Quiz
Flashcards