Can You Describe The Accounting For Non-Profit Organizations.
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ACCOUNTING FOR NON-PROFIT ORGANIZATIONS
Accounting is a language to communicate and understand financial information, every organization, whether involve in business or non business activities, needs accounting to get financial reports.
NGOs and Trusts are the examples of Non profit organizations which work without profit and these types of Non profit organizations are not involved in complex transactions like trading of goods or services and manufacturing activities therefore a very simple accounting system can work.
Mainly these organizations ar
e engaged in welfare activities or the activities that will entertain its members specifically and others in general. A very commonly understood example of such organizations is mosque or church. Almost all of us use to visit our worship place frequently and can understand very easily that it is an organization where we can have examples of assets, liabilities, incomes and expenses as well. But remember non profit organizations do not have owner's equity because these are not owned by any one rather a managing committee looks after all affairs of the organization. Therefore there is no question of owner's equity in the financial information of non profit organizations.
Accounting is a language to communicate and understand financial information, every organization, whether involve in business or non business activities, needs accounting to get financial reports.
NGOs and Trusts are the examples of Non profit organizations which work without profit and these types of Non profit organizations are not involved in complex transactions like trading of goods or services and manufacturing activities therefore a very simple accounting system can work.
Mainly these organizations ar
e engaged in welfare activities or the activities that will entertain its members specifically and others in general. A very commonly understood example of such organizations is mosque or church. Almost all of us use to visit our worship place frequently and can understand very easily that it is an organization where we can have examples of assets, liabilities, incomes and expenses as well. But remember non profit organizations do not have owner's equity because these are not owned by any one rather a managing committee looks after all affairs of the organization. Therefore there is no question of owner's equity in the financial information of non profit organizations.
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