An NPO earns income from life membership fees, subscriptions, grants, donations etc. Some organisations that come under NPO are hospitals, religious organisations and trade unions. Organizations that are established with the aim of providing services to society and not profit earning are called as Not-for-profit Organisations (NPO). State the meaning of ‘Not-for-Profit’ Organisations. Less : Deficit from Income and Expenditure Account If any surplus amount is received from I & E account, it gets added to capital fund, likewise any deficit will be deducted from the same and is known as Accumulated Fund.Ĭalculating Capital Fund Capital Fund at the beginning of the yearĪdd : Surplus from Income and Expenditure AccountĪdd : Subscription Amount (Capitalised amount) This is similar to the concept of capital for an organisation working to earn profit. The scenario where value of assets of NPO are more than its liabilities, it is called as capital fund. What is Capital Fund? How is it calculated? 2nd Puc Accountancy Chapter 1 Notes 2nd Puc Accountancy Chapter 1 Accounting for Not-For-Profit Organization Part – 1 Notes 2nd Puc Accountancy Chapter 1 Notes Short Questions
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