Nature of Non-profit Making Organisations

The main sources of income for non-profits include:

1. Subscriptions from members
2. Membership fees
3. Grants-in-aid
4. Donations from individuals or groups
5. Income from investments
6. Sales, such as bar or restaurant collections

Non-profits are required to maintain accurate and comprehensive accounting records to ensure proper fund utilisation in line with statutory requirements. Since these organisations do not engage in commercial activities, their primary income sources are subscriptions, donations, government assistance, and investment returns.

Typically, non-profits maintain a cash book to record all cash and bank transactions. Additionally, they use a ledger to track income, expenses, assets, and liabilities, along with a stock register to document fixed assets and inventory. Funds collected through life memberships, donations, legacies, and surpluses are recorded in a capital fund, often referred to as the accumulated fund. Notably, non-profits do not maintain a capital account.

Despite being non-trading entities, non-profits are legally required to prepare financial statements at the end of each accounting period. These financial statements provide essential information to members, donors, contributors, and the Registrar of Societies.

The financial statements of a non-profit organisation typically include:

1. Receipt and Payment Account
2. Income and Expenditure Account
3. Balance Sheet
4. Accumulated Fund Account