The organizations, which are established for the purpose of rendering social services to its members and to the society is known as non-trading concern. Such organizations include clubs, schools, colleges. hospitals, libraries, trusts, professional associations and unions. These organizations render their service to the members and to the general public, such as a club provides sports and other recreational services to the members. Schools and colleges provide education services, hospital provides treatment and services to the patients.
The sole object of non-trading concern is to provide necessary services to its members and the society at large through welfare activities. The aim of such organization is not to make profit. They should prepare systematic books of account to provide necessary information about receipts and payments. It also helps to know, whether the current income is sufficient to meet the current expenditures or needs. The balance sheet is prepared to know the financial position, besides providing information about the proper utilization of grants, donations, and so on.
The sole object of non-trading concern is to provide necessary services to its members and the society at large through welfare activities. The aim of such organization is not to make profit. They should prepare systematic books of account to provide necessary information about receipts and payments. It also helps to know, whether the current income is sufficient to meet the current expenditures or needs. The balance sheet is prepared to know the financial position, besides providing information about the proper utilization of grants, donations, and so on.
Proper accounting is essential for non-trading concern to provide the required information. Such institutions prepare receipts and payment account to show the receipts and payments of cash. Income and expenditure account is prepared to know the surplus or deficit for the period. Balance sheet is prepared to know the financial status of the concern.
The detailed and transparent financial information of non-trading concern can be obtained by preparing receipts and payment account, income and expenditure account as well as balance sheet.