Balance Sheet of NPO 🏛️
It is prepared exactly like a Trading Concern's Balance Sheet. Liabilities on the Left, Assets on the Right.
The Major Difference: Instead of "Capital", we have "Capital Fund" (or General Fund).
How to find Opening Capital Fund? 🕵️♂️
Often, the problem gives you the Opening Cash Balance but NOT the Opening Capital Fund. Solution: Prepare an Opening Balance Sheet (at the start of the year).
- Put all Opening Assets (Building, Furniture, Outstanding Subscriptions, Cash).
- Put all Opening Liabilities (Outstanding Salary, Advance Subscriptions).
- Balancing Figure = Capital Fund.
Format of Closing Balance Sheet 📝
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capital Fund: | Fixed Assets: | ||
| Opening Balance | 1,00,000 | Building | 80,000 |
| Add: Surplus | 10,000 | Furniture | 20,000 |
| Add: Life Membership Fees | 5,000 | Current Assets: | |
| 1,15,000 | Subscriptions Outstanding | 2,000 | |
| Specific Funds: | Cash in Hand | 15,000 | |
| Building Fund | 50,000 | ||
| Prize Fund | 10,000 | ||
| Current Liabilities: | |||
| Outstanding Rent | 1,000 | ||
| Total | 1,76,000 | Total | 1,76,000 |
If there is a specific fund (e.g., Prize Fund), incomes related to it (Donations for Prize) are added to the Fund, and expenses (Prizes awarded) are deducted from the Fund on the Liability side. They do NOT go to Income & Expenditure A/c.
Quiz Time! 🎯
Test Your Knowledge
Question 1 of 5
1. Capital Fund is calculated as:
💡 Final Wisdom: "The Balance Sheet proves that the organization is healthy and sustainable. The Capital Fund represents the accumulated savings of the organization over its lifetime." 🏦
Next up: Practical Problems - Solving a full NPO sum! 🧮