Accounting for non-profit organizations
By the end of this lesson you should be able to:
• Explain the main features and principles of a non-profit organization
• Define some key terms which are specific to non-profit organizations
• Prepare a receipts and payment account
What is a non-profit
organization?
An organization whose main objective is not to
make a profit but to provide a service to
members.
Examples of Non-Profit Organizations
Rotary Club of St. Lucia
(aka Rotaract Club)
St. Lucia Red Cross
Kiwanis Club of St. Lucia
(aka Key Club)
Examples of Non-Profit Organizations
Lions Club of St. Lucia
The Duke of Edinburgh
Award Scheme
(aka Dukers)
Junior Achievement St. Lucia
(aka JA Club)
Non-profit organizations
• Provide facilities for their
members to pursue a hobby.
• Provide a social experience
for their members.
• Their main method of making
revenue is through member
subscriptions (subs), as well
as fundraising e.g.
refreshment bars and
barbeques.
• Provide an avenue for citizens
who want to assist persons in
need or volunteer to
complete activities.
• The financial statements of a
non-profit organization are
different to those of a profit
organization.
Contrast between a profit and non-profit
organization
Profit Organization
Non-Profit Organizations
• Cash Book
• Receipts and Payments account.
• Trading and Profit and Loss account
• Income and Expenditure account
• Net Profit
• Surplus of income over expenditure
• Net Loss
• Excess of expenditure over income
• Capital
• Accumulated Fund
• Statement of financial position
• Balance Sheet
Receipts and Payments
Account
An account used by non-profit organizations to
record a summary of cash (bank) receipts and
payments.
The composition of the Receipts of Payments a/c
Examples of Receipts
Examples of Payments
• Subscriptions received from members
• Expenses for the upkeep of the
• Amounts received from fundraising events
• Donations from members, governments and
other organizations
• Amounts received from sale of fixed assets
• Loans from banks/members
organization e.g. utilities, rent, salary of
club secretary, stationery.
• Purchases of items for resale at fundraising
events
• Purchase of fixed assets for use by the club
• Repayments of loans from banks/members