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SS2: FINANCIAL ACCOUNTING - 2ND TERM

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Commercial and industrial organizations are set up primarily to make a profit, but non-profit making organizations like clubs, societies, and Charitable bodies are not profit-oriented, but to provide services to their members. In place of trading, profit and loss account found in the trading concerns, such associations prepare the following accounts to show the financial affairs to their members:

(a) Receipts and Payment account

(b) Income and Expenditure account

(c) Balance sheet.

Features of Non-Profit Making Organization

1. They are not set up to make profit

2. Funds are available from members contribution

3. Promotion of welfare activities to members

4. Surplus is not distributed as dividend.

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