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Non Profit Making

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Non Profit Making

  1. 1. Non Profit Making Organisations Mr Arthur
  2. 2. Aims of the Lesson <ul><li>Intro to Non Profit Making Organisations </li></ul><ul><li>Sources of Finance for Non Profit Making Orgs </li></ul>
  3. 3. Intro to Non Profit Making Organisations <ul><li>Non Profit Making organisations don’t make a profit but use their funds to promote the interests of their members </li></ul><ul><ul><li>Golf Clubs </li></ul></ul><ul><ul><li>Drama Club </li></ul></ul><ul><ul><li>Health Club </li></ul></ul><ul><li>Club is run by a Committee which is elected at the AGM </li></ul><ul><li>The Treasurer is responsible for the financial running of the club and will create the following: </li></ul><ul><ul><li>Trading Accounts from the Bar </li></ul></ul><ul><ul><li>Receipts and Payments Account </li></ul></ul><ul><ul><li>Income and Expenditure Account </li></ul></ul><ul><ul><li>Balance Sheet </li></ul></ul>
  4. 4. Sources of Finance <ul><li>The club will not sell products but provide a service for its members </li></ul><ul><li>Sources: </li></ul><ul><ul><li>Subscriptions = An Annual fee paid by members to use the facilities of the club </li></ul></ul><ul><ul><li>Revenue from Bar or sale of food </li></ul></ul><ul><ul><li>Donations </li></ul></ul><ul><ul><li>Fund-raising activities </li></ul></ul><ul><ul><li>Loans </li></ul></ul><ul><ul><li>Grants = a sum given by the local authority, lottery etc which doesn’t get paid back </li></ul></ul>
  5. 5. Aims of the Lesson <ul><li>Last Lesson </li></ul><ul><li>Intro to Non Profit Making Organisations </li></ul><ul><li>Sources of Finance for Non Profit Making Orgs </li></ul><ul><li>Today’s Lesson </li></ul><ul><li>Subscription Accruals and Prepayments </li></ul>
  6. 6. Subscription Accruals and Prepayments <ul><li>Accruals at End </li></ul><ul><ul><li>I and E = add on to Subscription value </li></ul></ul><ul><ul><li>BS = Current Asset as members still have to pay Subs </li></ul></ul><ul><li>Accruals at Start </li></ul><ul><ul><li>** Do the opposite </li></ul></ul><ul><ul><li>I and E = take away from Subscription value </li></ul></ul><ul><ul><li>Add on to Opening Accumulated Fund </li></ul></ul><ul><li>Prepayments at End </li></ul><ul><ul><li>I and E = take away from Subscription value </li></ul></ul><ul><ul><li>BS = Current Liability as members have paid and you still owe the service next year </li></ul></ul><ul><li>Prepayments at Start </li></ul><ul><ul><li>** Do the opposite </li></ul></ul><ul><ul><li>I and E = add on to Subscription value </li></ul></ul><ul><ul><li>Take away from Opening Accumulated Fund </li></ul></ul>
  7. 7. Aims of the Lesson <ul><li>Last Lesson </li></ul><ul><li>Intro to Non Profit Making Organisations </li></ul><ul><li>Sources of Finance for Non Profit Making Orgs </li></ul><ul><li>Subscription Accruals and Prepayments </li></ul><ul><li>Today’s Lesson </li></ul><ul><li>Life Membership </li></ul>
  8. 8. Life Membership <ul><li>Some clubs allow members to purchase Life Memberships </li></ul><ul><li>They pay a lump sum but pay no Subscriptions </li></ul><ul><li>Method 1 </li></ul><ul><ul><li>Fee is Transferred to Life Membership Account and interest each year is treated as Income </li></ul></ul><ul><li>Method 2 </li></ul><ul><ul><li>The Committee may decide on a period of time for writing off the Life Membership e.g. 25 years </li></ul></ul><ul><ul><li>Each year 1/25 th is treated as Income </li></ul></ul><ul><ul><li>Interest is also treated as Income </li></ul></ul>

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