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: http://www.bized.co.uk/learn/accounting/financial/nonprofit/index.htm (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 http://www.bized.co.uk/
Accounting terms and a wide variety of business vocabulary can be found on the new Business English Posters: http://wirtschaftsenglisch.lerntipp.at/