INCOME AND EXPENDITURE ACCOUNTS

Receipts and Payments Accounts

Receipts and Payments Accounts

Used for small non-profit oriented organization.

The organization must have no assets or liabilities

It’s a summary of the Cashbook entries.Gives a summary of cash received and

payments made during the year.

Receipts and Payments Accounts

Examples of organizations that use receipts and payments as a record of financial statements are small charities, clubs and associations.

Such organizations are mainly of a temporary nature.

Example 1

Receipts and Payments Account for the year ended 31st December 2005P P

Opening Bank Balance 800 Groundsman wages 600Hall Charges 1200

Total Subscriptions 5000 Spots ground rentals 500Gate Takings 2500 Committee Expenses 300Rent Received 800 Stationery Costs 150

Bank Balance c/f 63509100 9100

The UB Running Club

Income and Expenditure Accounts

Used by non profit- oriented organization in the place for trading, profit and loss account

Used by non profit oriented organizations with assets and liabilities other than cash.

However a non profit oriented organization can prepared a trading, profit and loss account if it has to calculate profit for a specific business or event done to make profit. Eg Football Club organizing a dinner dance party etc. or a Club operating a shop.

Income and Expenditure Accounts

Profit -Oriented Organisation Non- Profit Oriented Organisation1 Trading and Profit and Loss Account 1 Income and Expenditure Account2 Net Profit 2 Surplus of Inocme over Expenditure3 Net Loss 3 Excess of Expenditure over Income

Fuel for the day

Hold yourself solely responsible for what your life has become up to this point. Don’t blame anyone or anything else for your position in life. If you take full responsibility for your past, you have full authority to create your future. Wes Beavis

Accumulated Funds

In the balance sheet of a NFPO the word Capital is replaced by Accumulated Funds.

Assets = Accumulated Funds + Liabilities

Example 1

On the 1st January 2009 Gaborone Golf Club had the following assetsCash at Bank P200,Snack Bar Stocks P800 and Club house buildings P12 500.

During the year to 31st December 2009 the club received and paid the following amounts;

Example 1

Recepits PaymentsSubscriptions 2009 3500 Rant and Rates 1500Subscriptions 2010 380 Extention to Club House 8000Snack Bar income 6000 Snack Bar Purchases 3750Visitors Fees 650 Secretarial Expenses 240Loan from Bank 5500 Interest on Loan 260Competition Fees 820 Snack Bar Expenses 600

Games Equipment 2000

Example 1

Notes . The snack bar stock at 31st December 2009 was P900,

The games equipment should be depreciated by 20%

Prepare;1)Snack Bar Profit or Loss2)Income and Expenditure statement for the period

ended 31st Decemeber 20093)Prepare the Balance Sheet as at 31st December

2009

Answer

Step 1. Start with the IEA and correctly copy the title.

Step 2 List the relevant incomes from question, the ones that would normally go into the P&L Ac

Step 3 Pick each income, check from the question if it requires adjustment, if not enter the Figure in IEA if reference make required

adjustment and enter the figure. Step 4 Determine the Snack bar profit.Step 5 Repeat step 3 with expenditure and conclude the

IEA.

Income and Expenditure Account for the year ended 31st March 2009

RecepitsSubscriptions 2009 3500Snack Bar income 1750Visitors Fees 650Competition Fees 820

6720Rant and Rates 1500Secretarial Expenses 240Interest on Loan 260Depreciation on Games Equipment 400

2400Surplus of Income over Expenditure 4320

Balance Sheet as at 31st December 2009

Fixed AssetsClub House Buildings 20500Games Equipment 2000Depreciation 400 1600

22100Current Assets Snack Bar Stocks 900Bank 700

1600Currrent Liabilitiesadvance Sub 380 380

23,320 Financed ByAccumulated Funds 13500Add Surplus 4320 17820Loan From Bank 5500

23,320