Non-Profit Organisations (NPO) 🏥
Definition: Organisations established for rendering service to society or its members, and NOT for earning profit.
- Examples: Sports Clubs, Hospitals, Libraries, Schools, Charitable Trusts, Temples.
Main Objective: Service (Education, Health, Recreation, Religion).
Features 🌟
- Service Motive: Profit is not the goal.
- No Owners: There are no shareholders. There are Members or Trustees.
- Surplus/Deficit: They don't use the terms "Profit" or "Loss".
- Profit -> Surplus (Excess of Income over Expenditure).
- Loss -> Deficit (Excess of Expenditure over Income).
- Funds: Money comes from Subscriptions, Donations, and Grants.
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Capital Fund
Since there are no owners, there is no "Capital Account". Instead, they have a Capital Fund (or General Fund) which grows over time with accumulated surplus and life membership fees.
Quiz Time! 🎯
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💡 Final Wisdom: "They work for a cause, not for applause (or money). But they still need to count the money to keep the lights on!" 💡
Next up: Receipts & Payments Account - The NPO's Cash Book! 💰