Theory question 101
Not-for-Profit Organisations(a) Match the following items in Young Stars Social Club's account with their equivalent in the account of a Profit Making Organization:
Young Stars Social Club: Surplus; Accumulated fund; Receipts and payments account; Deficit; Income and expenditure account
Profit Making Organization: Cash book; Net profit; Net loss; Capital; Profit and loss account
(b) State five differences between a social club's account and a limited liability company's account.
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(a) Surplus – Net profit; Accumulated fund – Capital; Receipts and payments account – Cash book; Deficit – Net loss; Income and expenditure account – Profit and loss account.
(b) Any five: club aims at members' welfare, company at profit; club's result is surplus/deficit, company's is profit/loss; club's capital is accumulated fund, company's is share capital and reserves; club prepares receipts and payments and income and expenditure accounts, company prepares trading, profit and loss (and appropriation) accounts; club income comes from subscriptions, donations, entrance fees, company income from sales; surplus is added to the accumulated fund, company profit is shared as dividends; club is owned by members, company by shareholders; company accounts must follow the Companies Act and be audited/published, club accounts follow its constitution.
Pair each club term with its business equivalent, then contrast purpose, capital, statements and income.