What accounting rules do non-profits follow? What financial statements are required? 4-6 sentences

Expert Solution

NON PROFIT -MAKING ORGANIZATION RAISES FUNDS FROM MEMBERS,DONORS OR CONTRIBUTORS.

THEY ALSO RECEIVEDONATION OF TIME ,ENERGY AND SKILLS FOR ACHEIVING THEIR SOCIAL OBJECTIVE LIKE IMPARTING EDUCATION,PROVIDING MEDICAL FACILITIES ETC.ETC,,,FUND RAISING PROGRAMMES, ADVERTISEMENT,SUBSCRIPTIONS,GIFTS ,SALE OF PRODUCT OR PUBLICATIONS,ETC.

THE MAIN SOURCE OF FUNDS INCLUDE GRANTS AND DONATIONS

DONATIONS AND GRANTS RECEIVED IN THE NATURE OF CAPITAL RECEIPTS ARE SHOWN AS LIABILITIES IN THE BALANCESHEET OF NPO.

THESE MAY EITHER BE IN THE FORM OF CORPUS CONTRIBUTION OR A CONTRIBUTION TOWARDS REVOLVING FUNDS.

THE GRANTS TOWARDS A REVOLVING FUND IS USED TO ROTATE THE AMOUNT BY GIVING TEMPRORY LOANS FROM THE FUND TO OTHER NGO OR BENEFICIARIES FOR THEIR PROJECTS.

FINANCIAL STATEMENTS REQUIRED ARE-

1)BALANSHEET 2) INCOME AND EXPENDITURE ACCOUNT 3) RECEIPT AND PAYMENT ACCOUNT 4) CASH AND BANK ACCOUNT

ekkarill92 answered 1 year ago

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