Not-for-profit organizations are those that are established for the benefit of society or to promote art and culture in society. These are typically established as charitable institutions with a service mission. These organizations are managed by trustees. The trustees are chosen by the organization's members. Non-profit organizations raise funds from their members as well as the general public to achieve their goals. These organizations' primary goal is to provide service. They may, however, profit in the future. In general, these organizations do not manufacture, buy, sell, or provide services. As a result, they are not required to prepare Trading and Profit and Loss A/c. They deposit the funds received in the Capital Fund or General Fund A/c. Not-for-profit Organizational Characteristics: 1. Service Motive: These organizations exist to serve their members, a specific group, or the general public. They provide services for free or at a very low cost because their goal is not to make a profit. They do not discriminate against people based on their caste, creed, or skin color. They provide services such as education, food, health care, recreation, sports facilities, clothing, and shelter. 2. Members: Members of these organizations are charitable trusts or societies. These organizations' subscribers are their members. 3. Management: These organizations are managed by the managing committee or the executive committee. The committee is elected by the members. 4. Surplus: In due course, the surplus is distributed among its members. 5. Reputation: These organizations earn their reputation or goodwill by doing good things for the public good. 6. Accounting information users: These organizations' accounting information users include current and potential contributors, as well as statutory bodies.

1. ACCOUNTING FOR NONPROFIT
ORGANIZATION

2. FROM HOUSES OF WORSHIP TO
YOUTH ASSOCIATIONS TO
NEIGHBOURHOOD ASSEMBLIES OF
BUSINESS, NOT-FOR-PROFIT
ASSOCIATIONS MAKE OUR GROUPS
MORE BEARABLE SPOTS.

3. SIGNIFICANT ASPECTS OF
ACCOUNTING FOR NON-PROFIT
ORGANIZATIONS:
It gives a detailed look of all the donations they took for the course of a
year. It is very important that non-profit organizations keep a record of the
donations they take in and from whom they accept. Although non-profits
are exempt from paying income tax, except for a few rules for property
income or capital gains.
Taxability of the donation received:
Unrestricted commitment incomes
Temporarily restricted net assets
Permanently restricted net assets
Different donations received:

4. SIGNIFICANT ASPECTS OF
ACCOUNTING FOR NON-PROFIT
ORGANIZATIONS:
Expenses vs Expenditure done- Accounting of the expenses which are
done for the long run that can be en-cashed, and the cost incurred to meet
every day and current financial needs of the business, generally for a short
term is dealt with.
Accounting for Expenses
The spending from the whole collection of donations accounts for a
specific reason.
Spending from Corpus

5. SIGNIFICANT ASPECTS OF
ACCOUNTING FOR NON-PROFIT
ORGANIZATIONS:
• Approval of budgets by trustees- A budget is an estimation of revenue
and expenses over a specified future period. It is then approved by the
trustees of the non-profit organization after a timely review of financial
reports and planning.
• Spending vs budgeting reports- The budget report is made by trustees
and the annual spending report is compared, and then a balance is
made of all the spending.
Budgeting

6. The income of a non-profit entity is exempt from federal
income tax if the IRS approves it.
Approval of IRS
It is mandatory for Non-Profits too, to pay sales tax and
other taxes based on state-level requirements.
Sales tax and state-level taxes
Donation received by Nonprofit is exempt and no tax is
payable on the same.
Taxability of Donation Received
Non-Profits also need to pay employment tax even when
they are exempt under the federal income tax.
Employment Tax
HERE ARE SOME TIPS FOR NON-PROFITS TO KEEP
THEIR BOOKKEEPING PERFECT!

7. THANK YOU
W W W . M E R U A C C O U N T I N G . C O M