Question

The surplus/deficit of not-for-profit organisation is ascertained by:

• A. Income & Expenditure A/c
• B. Receipts and Payments A/c
• C. Profit & Loss A/c
• D. Income Statement

Hint:

Not-for-profit organisations prepare Income & Expenditure A/c instead of Profit & Loss A/c.

Answer 1

The Correct Option is A

Step 1: Receipts and Payments A/c.
This is a summary of cash transactions, both capital and revenue, but it does not show surplus or deficit.
Step 2: Income & Expenditure A/c.
This account is prepared on an accrual basis. It includes only revenue items (incomes and expenditures) and matches them for the year.
Step 3: Conclusion.
The difference between total revenue income and total revenue expenditure gives surplus or deficit.
Final Answer: \[ \boxed{\text{Income & Expenditure A/c}} \]