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JAMB Principles of Accounts 2011 Question 30

Question 30

Not-for-Profit Organisations

The major feature of not-for-profit-making-organization is that they are formed

  1. A.to use accumulated fund to describe the net amount owed to members
  2. B.mainly to improve the welfare of her members
  3. C.to engage in trading activities to sponsor its activities
  4. D.in order to compute the receipts and payments account.
Show the answer and explanation

Answer: B (mainly to improve the welfare of her members)

Explanation

Clubs and societies exist to serve their members, not to make profit.