Non-Profit Making Organisations

Non-Profit Making Organisations are organisations that want to do and provide something rather than make more money. Examples are: associations, clubs, charities, churches, unions, and societies.

The accountsof these organisations are simpler than they are for other legal types like sole trader, partnership or limited companies.

The bookkeeper or accountant has to keep track of the cash.

Here is the accounting jargon of NPOs:

Cash Account or Cash Book: Receipts and Payments Account

Profit and Loss Account: Income and Expenditure Account

Profit: Surplus

Loss: Deficit

Capital Account: Accumulated Funds

Balance Sheet: Balance Sheet

NPOs have no private owners; they belong to all of their members together.

E.g. a club could receive money for:

  • Subscriptions
  • Sale of refreshments
  • Raffles and other competitions
  • Sale of publications
  • Interest on deposit account at the bank
  • Sale of old equipment

Receipts will come from:

  • Purchase of refreshments
  • Purchase of raffle prizes
  • Purchase of new equipment
  • Rent of hall

At the end of the year the account will contain receipts and payments.

Source: (14.10.11)

Further examples and a big number of exercises for drawing up a Balance Sheet, a Receipt and Payments Account or the Income and Expenditure Account can be found on



Accounting terms and a wide variety of business vocabulary can be found on the new Business English Posters: