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I.com Part 2 Accounting Lectures non trading concern Q # 7 #icomaccounting #icompart2nontradingcon
Lecture is prepared according to KPK book board/punjab text book board/Sindh text book board/Fedral board/FBISE BISE,I.Com Part 1 book,lecture is prepared in different languages i.e Urdu/hindi/English. online lectures for Commerce Students for 11th class, 12th class, 1st year, first year, 2nd year, second year for Principles of Accounting is created for all students who want to prepare this topic single entry system/non trading concern in detail.
this series of online lectures prepared by Mr.Muhammad Hasnaat lecturer / teacher of Principles of Accounting part 1,part 2.in these lectures he will discuss Topic Important Terms & Concepts,definitions, journal entries of single entry system/non trading concern.
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1. Define Non-Trading Concerns.
Non-Trading Concerns are those concerns whose basic object is not to earn profit. These concerns do not deal with buying and selling of goods. Their primary object is to serve the society; Examples of such concerns are Hospital, Colleges, Welfare Societies, Clubs, Mosque, Libraries, Trust etc., etc.
2. Define Trading Concerns.
Trading Concerns are those concerns whose basic object is to earn profit. They deal with buying, selling and manufacturing the goods. Such concerns are textiles unit, sugar mills, departmental stores and factories.
3. What is receipt and payment account?
Receipts and payments account is a summary of cash book. Receipts are shown on the debit side and payments are shown on credit side.
4. Define income and expenditure account
Income and expenditure account is prepared to find out surplus or deficit of the concern during a certain period of time Revenue receipts are treated as incomes and revenue Payment are treated as expenditures.
5. balance sheet
is financial statement which shows financial position on particular date
6. What is capital fund/ accumulated fund?
The excess of total assets over external liabilities of a non-trading concern is called capital fund.
7. What do you mean by word surplus (profit)?
The excess of income over expenditures of a concern during a certain period of time is called surplus.
8. Define deficit (loss).
The excess of expenditures over incomes of a concern during a certain period of time is known as deficit.
9. What are key statements prepared in accounts of non profit seeking organization?
The following three key statements are prepared at the end of year
o Receipts and payments accounts
o Income and expenditure accounts (Profit and loss account)
o Balance sheet
10. What are key statements prepared in accounts of profit seeking organization?
The following key statements are prepared at the end of year
o Trial Balance
o Trading and Profit & loss account
o Balance sheet
11. Define legacy?
An amount received by the non-trading concern after the death of a person on his “will” is called legacy.
It should be treated as capital receipts and included capital fund account.
12. Define subscription?
Subscription is an amount paid by the members to keep their membership alive. It may be annually or a life time. It should be credited to income and expenditure account.
13. Define donation?
Donation is the amount received by non trading concern from alive person, firm, company or any other body by way of gift. if donations are for specified purpose then it should be treated as capital expenditures and otherwise it will be revenue credited to income and expenditure account
14. Define admission fee/ entrance fee?
An amount which is paid by every new member to join the institution at the time of admission is known as admission fee or entrance fee.
15. What is Honorarium?
The amount paid to the person who is not the employee of the organization is said to be honorarium person may be invited to deliver lectures or artists may be invited to give their performance
It should be debited in income and expenditure account
16. What are the sources of non-trading concerns?
A non-trading concern runs their organization by way of following sources.
1. Donation
2. Membership
3. Annual subscription
4. Admission fee / Entrance fee
5. Legacy
17. Define special subscription?
It is the special subscriptions collected from the members who participate in a particular activity because of the cost involved in providing these may vary considerably. It should be credited to income and expenditure account.
18. Life membership fee?
An amount paid by the member to get membership for life time. It is paid in lump sum or in installments.
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