a i. Explain the following terms:
Accumulated Fund
a ii. Explain the following terms:
Statement of Affairs
b. List five sources of income for a not-for-making organization
c. State three differences between Receipts and Payments Account and Income and Expenditure Account
Explanation
a i. Accumulated fund holds excess money received by a non-profit organization. It is similar to the retained earnings of a profit firm, the accumulated fund grows when revenues are greater than expenses and there is budgetary surplus.
a ii. Statement of affairs is a document typically prepared by ab accountant, which details a company's assets and liabilities. It is designed to provide an overview of the company's financial position.
b. - Donations
- Subscriptions/Dues
- Fines
- Profits from bar
- Entrance fees
c. - Receipt and payment account is a summary of cash and bank transactions while Income and expenditure account is a summary of current year income and expenses.
- Receipt and payment account records transactions related to both revenue and capital nature while Income and expenditure account records transactions related to revenue nature only.
-Receipt and payment account is a real account while Income and expenditure account is a nominal account.