“Income and Expenditure Account of a Not-for-Profit Organisation is akin to Profit and Loss Account of a business concern”. Explain the statement.

Explanation

Income and Expenditure Account is somewhat like Profit and Loss Account. In alternative words Profit and Loss Account is ready as financial gain and Expenditure Account just in case of NPO. the sole distinction is that profit associated loss account is ready to determine the profit or loss of the organisation and financial gain and Expenditure Account is ready to determine surplus or deficit throughout an accounting amount.



Income and Expenditure Account additionally follows an equivalent rules and regulation because it follows just in case of Profit and Loss Account which suggests. all the adjustment are going to be created on accounting system.



Just like Profit and Loss Account it additionally records all transactions of revenue nature that are associated with the present accounting year considering the adjustment for outstanding or paid because the case could also be. The debit side of income and expenditure records of all the expenses and referred to as Expenditure facet and accounting system of financial gain and Expenditure Account records all the financial gain and gains and referred to as the financial gain side.


Similarities between financial gain and Expenditure Account and Profit and Loss Account.


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