GSEB Class 11 Accounts Notes Part 2 Chapter 9 Accounts of Non-trading Concerns

   

This GSEB Class 11 Commerce Accounts Notes Part 2 Chapter 9 Accounts of Non-trading Concerns covers all the important topics and concepts as mentioned in the chapter.

Accounts of Non-trading Concerns Class 11 GSEB Notes

There are several institutions or concerns in society, those who do not have an objective of generating profit. They have an aim to serve the society, to provide facilities and services to the members, to undertake the activities for the welfare of the members. In short, these institutions have an aim to serve the peoples, to extend the academic activities with an intention to develop academic, social, religious, cultural or art related and donation generating activities. These kinds of concerns are known as Non¬Trading Concerns. Clubs, Gymkhana, Hospitals,

Trade Associations, Educational Institutions, Libraries, Political Unions, Labours Associations, Customers Co-Operative Societies, Orphanage, Religious Institutions, Charitable Institutions, etc. are the examples of non-trading concerns. These concerns generate income from their predetermined activities and use it for the society or predetermined aims of the concern. These concerns maintain own accounts, which are known as account of non-trading concerns. Accounts of non-trading concerns are prepared differently than the accounts of trading concerns.

→ A concern whose aim is not to earn profit, but to serve the society and work for the welfare of the members, is a non-trading concern.

→ Receipt-Payment Account has similar nature to Cash Account (Cash book). In which, balances of cash and banks as well as cash incomes and expenses are recorded.

→ Income-Expenditure Account is similar to the Profit and Loss Account of trading concerns. In which, only revenue incomes and revenue expenses of current year are disclosed.

→ Income of the concern which is regular in nature and arising from the activities of concern is known as revenue income.

→ Income of a concern which is not regular in nature, as well as the benefit of which income is available for a longer period of tihie is known as the capital income.

GSEB Class 11 Accounts Notes Part 2 Chapter 9 Accounts of Non-trading Concerns

→ Expense which is incurred on regular basis to run a routine activity of the concern is known as revenue expense.

→ Expenses which is not incurred regularly or repeatedly and the benefit of which is received by the concern for a longer period of time is known as capital expense.

→ Expenses of which the benefit is received by the concern for more than one accounting year, is a deferred revenue expenditure.

→ If the amount of expenses relating to a specific fund is more than the amount of that fund, such excess will be treated as revenue expenditure.

→ When a fund is created for any specific purpose, all expenses related to that fund are deducted from and all incomes relating to that fund is added therein.

→ in the absence of any clarification, Entrance fees should be treated as a revenue income while Donation is considered as a capital income.

→ In the absence of any clarification, Life. Membership fees and Legacy are considered as a capital income.

→ Excess of incomes and Excess of expenses are also known as Surplus and Deficiency respectively.

Leave a Comment

Your email address will not be published. Required fields are marked *