BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Non-trading organisations don’t prepare trading and profit and loss account, however they prepare Receipt and Payments account, Income and Expenditure account and Balance Sheet. Receipt and Payments account is a summary of cash receipts and cash payments, Income and Expenditure account is like profit and loss account.

Detailed explanation-2: -Income & expenditure account is normally prepared by the non trading organizations like lawyers, doctors, chartered accountants etc. Was this answer helpful?

Detailed explanation-3: -As stated earlier, normally such organisations are not engaged in any trading or business activities. The main sources of their income are subscriptions from members, donations, financial assistance from government and income from investments.

Detailed explanation-4: -It is prepared by accountants chosen by the enterprise’s management and is audited by an independent auditor. It does not begin with the opening balance, and it follows back the incomes received and expenditures incurred by the non-trading entities during the financial year.

Detailed explanation-5: -The organisations whose main objectives are not to earn profit but to provide valuable services to its member and to the society are known as non-trading organisations. These organizations are involved in promoting welfare of society.