NCERT 12th Accountancy Part 1 Non-for-Profit Organisation and Partnership Accounts
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NCERT Accountancy Part 1 dives into the world of accounting for two distinct entities: Non-Profit Organizations (NPOs) and Partnership Firms.
NCERT 12th Accountancy Part 1 Non-for-Profit Organisation and Partnership Accounts
Non-Profit Organizations (NPOs):
- Focus: Serve a social cause, not generate profit.
- Funds: Donations, subscriptions, grants, etc. (credited to capital or general fund).
- Accounting: Simpler compared to trading concerns. No need for Trading and Profit & Loss Account.
- Financial Statements: Focus on income and expenditure statements, reflecting inflows and outflows of funds.
Partnership Firms:
- Formation: Two or more individuals come together to share business risks and profits.
- Accounting: Similar to sole proprietorship with some key differences.
- Capital Accounts: Maintain separate capital accounts for each partner, reflecting their investments and drawings.
- Profit/Loss Sharing: Profits or losses are distributed according to a pre-determined agreement or the Indian Partnership Act.
- Changes in Partnership: Processes for admitting new partners, retirement or death of existing partners are outlined.
Key Concepts:
- Fixed vs. Fluctuating Capital Accounts: Different methods for recording capital introduced/withdrawn by partners.
- Interest on Capital: Partners might receive interest on the capital they invest in the firm.
- Interest on Drawings: Partners might be charged interest on the money they withdraw from the firm.
- Profit and Loss Appropriation Account: Used to show the final appropriation of profit or loss for the year.
Learning Outcomes:
By studying Part 1, you’ll gain a foundational understanding of:
- Accounting principles for non-profit organizations.
- Formation and accounting practices of partnership firms.
- Distributing profits/losses and managing changes within a partnership.
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