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Bill slip format for non-profit organizations

hi in this video I'm going to explain receipts and payments account so before that let me explain about the basic concept of nonprofit organization so generally the business concern can be classified into two categories one is trading concern another one is non-trading concern SO trading conscent means their ultimate objective is to earn profit or to maximize the profit for their owners so in order to make profit they'll sell the goods and services to the customer by way of in order to maximize their profit so this is the main objective of trading concern non-trading organization means is just opposite of trading concern so non-trading means their ultimate objective is to rent service to the society to meet some social desirable Goods or to rent service to its member it is called it is also otherwise called as nonprofit making so the non-trading concern also called as nonprofit organization in trading account we need to have three things while they prepare final account the final account consist of three part one is trading account second one is profit and loss account and third one is balance sheet these are the three divisions in trading account so in order to know the trade result so in trading account we used to record opening stock purchase of raw material and all direct expenses will be comes under debit side of trading account in credit side of trading account we used to record sales closing stock all these things will be recorded in credit side of trading account with that we can able to know the trade result that is gross profit or gross loss after finding gross profit or gross loss the second step is preparing profit or loss account with the help of profit and loss account what you can able to know the financial position of the company whether the company incurred profit or loss that can be assertain with the help of profit or loss account and finally they'll prepare balance sheet balance sheet means in order to know the State of Affair of the company so these are the three divisions which comes under final account of trading concern that is profit making concern profit oriented concern now look at the non-trading organization so non-trading organization means example uh education institution Sports Club hospitals charitable institution religious institution all these organization being nonprofit seeking do not prepare profit and loss account so profit and loss account trading and balance sheet is prepared by the trading concern but this profit and loss account is not applicable to non-trading organization why because their objective is not making profit profit even so they would like to know whether their current expenses are being met out of their current income so they also know whether they have sufficient cash balance or not for that purpose they need to prepare final account final accounts of nonprofit organization okay so when you prepare final accounts for nonprofit organization first step is reips and payments account in profit organization in trading organization they'll have three steps not trading account profit and loss account and balance sheet but here first you need to prepare receipts and payments account where you used to record only inflow of cash and outflow of cash that's all so there will be no any other transaction only cash and Bank transactions will be recorded in the receipts and payments account and after preparing the receipts and payments account then you can prepare income and expenditure account so income and expenditure account is just like a profit and loss account but here you won't be getting any profit or loss so instead of profit or loss you'll have either deficit or Surplus but in profit and loss account we'll have net profit or net loss why because their intention is to make profit that's why they'll prepare profit and loss account but here you need not prepare profit and loss account instead of that you need to prepare income and expenditure account to know the income and to know the expenses and finally you'll have either Surplus or deficit and finally you can prepare balance sheet which shows the assets and liabilities of the organization whether it is education institution or Club whatever it is they also have some assets and liabilities know that you can show in balance sheet so this is the procedure to prepare final accounts for nonprofit organization so in this video I'm going to explain only receipts and payment account in the next video I'll explain income and expenditure account and balance sheet let us see the re and payments account format so receipts and payment account for the year ended so you need to mention you need to write the date usually the receipts and payments account will be prepared at the end of the financial year here debit side receipts credit sides payments left hand side is called receipt side right hand side is called payment side okay so when you prepare receipts and payments account you have to start with opening balance that is the last year closing balance will be the opening balance for current year no you have to start with opening balance that is two balance brought down cash balance cash in hand and cash at bank and you'll have opening balance no and after that you have to add all capital receipts and revenue receipt whether it is a capital nature or Revenue nature whether the income is belong to current year or last year or next year if you receive any amount during this particular year just enter that amount in retive side for example Capital rece means non recurring nature for example donation you won't get donation every month or every year you won't get donation so donation will be collected once in a while so it is called as capital nature or Capital receipt and revenue receipt means recurring nature you'll receive subscription from the members regularly and you receive rent so in such case is called as Revenue receipt Revenue receipt means recurring in nature Capital receipt means Capital nature that is non- recurring nature is called Capital receipt so whether it is capital nature or Revenue nature just enter all receip which you have incurred or which you have received during this year that will be shown in receipt side you have to start with opening balance and record all the receipts which you have received during this year and now come to the payment side payment side just record the payments that is outflow of fund outflow of cash or when you pay any check or when you pay any cash that will be recorded in this side that is capital payment as well as Revenue payment so Capital payment means non recurring payment for example purchase of furniture a purchase of any asset is a capital nature when you purchase a Furniture you need to pay some amount now that amount is called as capital payment or Capital nature in the same way Revenue payment you need to pay rent regular every month month you need to pay some amount as rent that expense is called as Revenue payment that is recurring non recurring means Capital recurring means Revenue so whether it is capital payment or Revenue payment you have to enter that amount under payment side and finally you'll have balancing figure it is called as closing balance that is closing cash in hand and cash at bank so this is a procedure to prepare receipts and payments account so there will be no adjustment in the receipts and payments account only enter all the receipt whether it is capital nature or Revenue nature enter the receipt in left hand side and enter all the payments that is outflow of cash will be recorded in payment site so receipts and payments account just like a real account what is the rule of real account debit what comes in credit what goes out reips and payments account is just like a real account just enter all receipts and enter all payments debit what comes in credit what goes out look at this problem prepare receipts and payments account of a club for the year ended 31st December 2014 from the following particulars opening balance opening cash balance is there that is the last year closing balance no so current year opening balance 50,000 is there receipt of entrance fees 18,000 subscription received for 2014 so they ask you to prepare receips and payment account for the year 2014 but in this year they have received subscription for 2014 as well as 2015 that is this amount is belong to next year but you need to show this also under reips and payment account why because you have received subscription during this year okay so you have to enter this amount also in the receipt side and previous year subscription received I told you know whether the receipt is belonged to current year or future year or previous year or if the transaction take place during this year okay subscription relating to current year or next year or previous year so all these three transactions took place during this year no so you have to enter you have to show all these three subscriptions in the receipt side then life membership fees also rece entrance fees rece donation received it's a capital nature no so you have received donation so this is also receip purchase of investment so purchase of investment means payment outflow of of cash rent paid salaries paid electricity charges Printing and stationary payment for purchase of cricket balls it is a payment site purchase of cricket bats payment insurance premium paid payment repats payment Mis expense payments all you have to do is just enter all the receipt in receipt site and enter the payment under payment site and you have to start with opening cash balance and enter all receipt in receipt site and all the payments will be shown under payment side and finally you'll have closing cash balance you have started with the opening cash balance no your final answer will be the balancing figure will be closing cash balance okay they ask you to prepare receipts and payments account of e for the year ended 31st December 2014 so left hand side is receipt side and right hand side is payment side this account start with opening cash balance I told you no so you have to start with opening cash cash balance opening cash balance is there how much 50,000 is there no start with the opening balance to balance brought down how much 50,000 all you have to do is only find out the receipt and enter here and just take the payment all the payment transaction will be recorded in payment site and you will have final balancing figure no your final balancing figure will be closing cash balance receipt of entrance fees how much 18,000 no so enter this amount in receipt side to receipt of entrance fees 18,000 next subscription receip is also received for 2014 for 2015 and previous year that is 2013 subscription received so all these things are received during this year no so just write all the incomes in reite to subscription for 2014 how much [Music] 10,000 for 2015 that is next year income also received during this year and previous year 2013 also you have received now how much 2,000 life membership fees how much 8,000 this also rece for Club to life membership fee how much 8,000 entrance fees is 4,000 this also receipt to and entrance fees how much 4,000 donation receed 60,000 this also Reed Capital nature to [Music] donation received how much 60,000 purchase of investment outflow of cash that is payment you have invested amount for purchase of investment you have paid amount for purchase of investment 40,000 this transaction under payment Side by purchase of investment how much 40,000 next rent paid this also payment by but Revenue payment Revenue Nature by rent how much 10,000 next item salaries paid 25,000 payment Side by salaries 25,000 next electricity charges 4,000 payment Side by electricity charges 4,000 next Printing and stationary this is also payment by Printing and stationary 800 payment for purchase of cricket balls this is also payment by Cricket balls 1,200 next item purchase of cricket bats this is also payment buy cricket bats how much 3,000 next item insurance premium paid 500 rupees this also payment by Insurance how much 500 next item repairs repairs also expense payment by repair 300 the last one is miscellaneous expense miscellaneous expense means some petty expenses all the petty expenses combinely called as miscellaneous expenses also payment Side by miscellaneous expenses 400 so you have started with opening balance 50,000 you have entered all the receipts in receipt side and you have entered all the payments under payment side now you'll have balancing figure this side so the balancing figure will be the closing cash balance just find the [Music] total 1H 64,000 enter the same amount here also 1H 64,000 balancing figure is 78,500 by balance carry down that is balancing figure so this balancing figure is a closing cash balance you started with opening balance 50,000 you have received amount from various sources and the total receip is 1 164,000 out of 1 lakh 60 64,000 you have made payment for various things and the excess of re over payment is called closing cash balance the current cash balance is 78,500 this will be the closing cash balance for the current year and the next year this will be the opening balance when you prepare retion payment for the next year this will be comes in rece side when you prepare receipts and payments account for the next year this will be comes under rece de side thank [Music] you