GOVERNMENT ISLAMIA COLLEGE, RAILWAY ROAD, LAHORE

NON TRADING CONCERNS

Definition: Organizations or individuals involved in the activities for social welfare or for promotion of trade, commerce, arts, sports, etc. and there primary objective is not to earn profit. OR: Organizations or individuals working for social welfare or promotion of trade, commerce, sports, etc. and not for earning profit.
EXAMPLES:
Trade Associations; Chamber of commerce; Lahore Gym Khana; Pakistan Agricultural Research Council Islamabad; Pakistan arts Council; etc.

In non trading concerns following things are used:

1. Receipts and Payments Account:

It is a summary of all cash received and paid either these are capital receipts and payments or revenue receipts and payments. OR: It is a summary against all capital receipts and payments or revenue receipts or payments. NOTE: A receipt and payments account ios a summarized cash book of given period.

2. Income and Expenditure Account:

It is a summary of all revenue incomes and expenditures and difference b/w all incomes and expenditures shown in form of surplus an deficit. Surplus: It is known as income is excess over expenditures. Deficit: It is known as expenditures are excess over income.

3. Balance Sheet:
It is the summary of all Assets, Liabilities and Capital fund.
Capital Fund: In Non Trading Concerns capital is collected in form of funds so it is regarded as Capital fund.

By: Muhammad Usman Saeed

B.Com. Government Islamia college, Railway Road, Lahore

GOVERNMENT ISLAMIA COLLEGE, RAILWAY ROAD, LAHORE

Specimen of Income and expenditures Account: NAME OF ORGANIZATION Income and expenditure Account For the year ended ________________ Credit
Amount Rs. xxxx xxxx xxxx xxxx xxxx xxx xxxxx Incomes Subscription xxx Add: O/S subscription xxx Less: Advance Sbscrp xxx Less: Last Year Sbscrp xxx Entrance Fee, donations, Life membership fee, etc. Deficit/Excess of expenditures over income Amount Rs.

Specimen: Debit

Expenditures Salaries Rent, Rates and Taxes Advertising Printing & Stationary Honorarium, Etc. Surplus/Excess of income over expenditures

xxxx xxxx xxx xxxxx

Specimen:
Liabilities Capital Fund xxxx Add: Capitalized receipts x Add: Surplus xxx Or Less: Deficit (xxx) Long term Liabilities: A------------B------------etcShort Term Liabilities: C------------D------------etc-

Specimen of Balance Sheet: NAME OF ORGANIZATION Balance Sheet As on_______________

Amount Rs. Assets Fixed Assets: A-----------------B-----------------C-----------------etcCurrent Assets: D------------------E------------------F------------------G------------------H------------------etcAmount Rs. xxx xxx xxx xxx xxx xxx xxx xxx

xxxx xxx xxx xxx xxx XXXXX

XXXXX

Calculation of capital asset fund: Capital fund = Opening Assets + Instructions given in the question + Opening Liabilities.

By: Muhammad Usman Saeed

B.Com. Government Islamia college, Railway Road, Lahore

GOVERNMENT ISLAMIA COLLEGE, RAILWAY ROAD, LAHORE

Treatments of some important items:

Items Donation Given in Receipts & paymentsA/C Treatment Income& expenditure A/C Normally it is written on income side. OR if it is not mentioned that make some part of donation as revenue then only revenue part will written in this a/c and remaining will be Capitalized Balance sheet Heavy donations, or donations collected for special purpose are written in Capital fund on Liabilities side. Capital fund Properties or cash received on A/C of Legacy is shown on assets side on one hand nd and on 2 hand it is added into capital fund After deducting current period amount, remaining amount will be shown iin balance sheet on Liabilities side. In special cases or if it is given in lump sum then it is added to capital fund. NO TRATMENT

Given in Receipts side

Legacy Legacy refers to property or cash received by virtue of a will of a person after his death.

-------NO TREATMENT-----Receipts Side

Life Membership Fee Receipts Side

In income side Current period is written, fair portion of this, written on income side. If nothing is mentioned then No Treatment

Entrance Fee

Receipts side

Generally it is our income or if it is given in portions

Purchase and sale of newspaper Purchase and sale of sports material Sale of Assets

Purchase is given in payment side and sale is given in receipts side. Purchase is given in payment side and sale is given in receipts side. Receipts Side

SUBSRIPTIONS i. ii. iii. iv. v. Last year O/S Subscription Last year O/S Subscription Current year O/S Sbscrp Advance Sbscrp (of next year/s) Advance Sbscrp (of next year/s)

Receipts side Receipts side Adjustment Adjustment Receipts Side Adjustment

Purchase of newspaper is written on expense side and sale is written on income side Purchase of sports material is written on expense side and sale is written on income side In case of Profit or loss, loss will be debited the I&E A/C and in case of profit, If amount of profit is small then it may be credited the I&E A/C. Current year subscription is written on income side NO TREATMENT Less from current subscription in income side Added in current subscription on Income side NO EFFECT Less from current subscription on income side Expenditures side

NO TREATMENT

In case of heavy, big or normal profit, profit will be added to the Capital Fund NO TREATMENT Added in capital Fund NO TREATMENT Written in Balance Sheet Written on Liabilities side It is written on liabilities side. NO EFFECT

Honorarium

Payment side

By: Muhammad Usman Saeed

B.Com. Government Islamia college, Railway Road, Lahore

GOVERNMENT ISLAMIA COLLEGE, RAILWAY ROAD, LAHORE

Special funds are our Liabilities. All current years/periods, outstanding expenses or incomes at the beginnings will be less and at the end will be add. All previous years or next years expenses or incomes will be less or ignored. All current periods incomes and expenditures will be written in current years Income & Expenditures A/C. During year purchase of any asset or liabilities are not included in Opening statement of affairs, to find capital fund.

POINTS TO BE PONDER

__________________________________________________________ If You learn from your mistakes then you are Intelligent. But If you learn from others mistakes then you are Genius.

By: Muhammad Usman Saeed

B.Com. Government Islamia college, Railway Road, Lahore