Steps to be followed while preparing financial statements of Not-for-

profit Organisation:
Step 1; Statement of Affairs to calculate Accumulated fund

……… Club

Statement of Affairs as on 31st December, 20….

$ $
Assets:
Non-current assets (Premises, furniture, vehicles etc.) XXX
Current assets (Inventory, subscription owing, cash and bank balance XXX
etc.)
Total assets XXX

Less, Liabilities:
Current liabilities (Creditors, subscription in advance etc.) XXX XXX
Accumulated fund=Total assets-Total liabilities XXX

Step 2; Receipt and Payment Account

……… Club

Receipt and Payment Account for the year ending 31st December, 20….

Dr. Cr.

Date Receipts $ Date Payments $

Opening Balance b/d XX Wages and salaries XX
Annual subscription XX Repair expenses XX
Sale of equipment XX Purchase of equipment for XX
club use
Sale of tickets XX Purchase of equipment for XX
resale
Sale of refreshment XX Heating and lighting XX
Life membership fee XX Purchase of refreshment XX
Hire of dress and other items XX
Closing Balance c/d XX
XXX XXX
Step 3; Workings for additional information:

Annual Subscriptions a/c

Dr. Cr.

$ $
Opening owing b/d (O) XX Opening advance(prepaid) b/d (P) XX
I & E a/c (bal fig.) XX Cash received XX
Closing advance(prepaid) c/d (P) XX Closing owing c/d (O) XX
XXX XXX
Opening owing b/d XX Opening advance(prepaid) b/d XX

Life subscriptions a/c

Dr. Cr.

$ $
I & E a/c (bal fig) XX Opening balance b/d XX
Closing advance(prepaid) c/d XX Cash received XX
XXX XXX
Opening balance b/d XX

Club equipment and assets a/c

Dr. Cr.

$ $
Opening balance b/d XX I & E a/c (depreciation) XX
Cash paid XX Balance c/d XX
XXX XXX
Opening balance b/d XX
Step 4; Income statement for trading activities

Example:

Refreshment trading account for the year ended 31st December, 20….

$ $
Sale of refreshment XXX
Less, cost of sales:
Opening inventory XX
Add, purchases XX
Less, closing inventory (XX) (XXX)
Gross profit XX
Less, expenses related refreshment only (XX)
Profit(loss) from sale of refreshment XX
Note: we can prepare trading accounts for other trading activities also like concerts,
drama or other cultural shows, sale of sports materials and equipment etc.
Step 5; Income and Expenditure account

……… Club

Income and Expenditure account for the year ended 31st December, 20….

$ S $
Annual subscriptions XX
Life subscriptions revenue part only XX
Profit on sale of refreshment XX
Profit on disposal of assets and equipment XX
Donation and charity revenue part XX
Rent from hall or premises or compound XX
Dinner/Dance/Concerts:
Sale of tickets XX
Less, hire of band, dress etc. (XX)
Less, payment for artists (XX) (XX) XX
Refreshment bar:
Refreshment bar takings XX
Less, cost of foods and bar (XX) XX
Total incomes XXX

Less, expenses:
Wages and salaries XX
Repair of club equipment and assets XX
Heating and lighting XX
Secretary’s payments and expenses XX
depreciation XX
Utilities expenses XX
Interest on loan XX
Loss on disposal of assets XX
Upkeep of ground XX (XXX)
Surplus (Deficit) XXX
Step 6; Statement of Financial Position

……… Club

Statement of Financial Position as on 31st December, 20….

Cost Provision for Net Book

Depreciation Value
Assets $ $ $
Non-current Assets:
Land and building/premises XXX (XX) XXX
Plant and equipment XXX (XX) XXX
Furniture XXX (XX) XXX
XXX (XX) XXX
Current Assets:
Inventory XXX
Annual subscription owing/arrears/accruals XXX
Prepaid expenses XXX
Bank balance XXX
Cash in hand XXX XXX
Total Assets XXX

Liabilities:
Opening Accumulated Fund XXX
Add(less), Surplus/(Deficit) XX/(XX)
Add, Donations/ Legacy/ Gift only capital XXX XXX
part

Non-current liabilities:
Long term loan XXX

Current liabilities:
Trade payables/creditors XXX
Other payables(expenses owing/accruals) XXX
Subscription advance XXX
Bank overdraft XXX XXX
Total liabilities XXX