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Wednesday, June 9, 2010

Accounting Procedures of Non-Trading concern

Like trading organization, non-trading concerns also maintain some usual books of account like, journal, ledger cash books, trial balance etc. However, it is difficult to keep full set of books by a small organization. Therefore, most of the non-trading organization, prepare cash book only before the preparations of final accounts. These organizations have to prepare the final accounts more or less similar to that of trading organization by following double entry book keeping systems to answer on the following three points.
  1. What is the summary of the cash transactions of particulars period?
  2. Is the income of the year sufficient to meet the expenditures?
  3. What is the financial position of the organization?
The final accounts of non-trading concerns are as follows:
  • Receipts and Payments Account.
  • Income and Expenditure Account.
  • Balance Sheet.

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