FAC1502 Non-profit Entities Notes

8/16/2019 FAC1502 Non-profit Entities Notes

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GROUP 3E

FAC 1502 SEMESTER 1-2016

UNISA

NON-PROFIT ENTITIES

[STUDY UNIT 16]Prepared by RAMASHAU ALUWANI

2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 1


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MENU

• INTRODUCTION

• BACKGROUND

•

PURPOSE• ENTRANCE & MEMBERSHIP FEES

• MUST DO EXERCISES

• TICK-BOX• INSPIRATIONAL QUOTES



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INTRODUCTIONDear Honourable Members

Go through the previous question papers and check how the

questions in exam would look like. By practising previous

question papers will also assist you to assess yourself on this

topic. If you want to master this topic attempt questions listed

on Slide 10.

Easy marks!!!

Kind regards

Mr. Ramashau AluwaniUNISA E-Tutor: FAC 1502 (Group 3E)

“Do something wonderful, people may imitate it” Albert

Schweitzer


http://www.brainyquote.com/quotes/quotes/n/nelsonmand391070.html


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BACKGROUND• Non-profit organisation can be defined as an economic entity which has

the legitimate goal of furthering certain interests of the community.

• Its objective is not to distribute profits to the members but to use the

profits in order to achieve the stated goal.

• Such an entity is oriented to render a service to its members, and not to

pursue financial gain.

• These entities can range from informal social clubs.

• Revenue may be acquired from a variety of sources, such as membership

fees, and not ownership, is acquired through the payment of membership

fees.

• Other source of income may include: tuck shops, bars, restaurants,

donations, fund-raising projects, bequests and government subsidies.

• Members of a non-profit organisation can therefore not claim the same

rights in the entity.



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PURPOSE

• The main purpose of non-profit entities is torender a service to their members or thecommunity.

•Membership, not ownership, is usually acquiredthrough the payment of an entrance fee andannual subscriptions.

• Non-profit does not mean they may not trade or

make a profit, it means that surpluses should beused for the benefit of the members of theseentities.



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ENTRANCE FEES & MEMBERSHIP FEES

• Entrance Fees are payable by prospective members whenthey apply for membership of a club.

• Entrance Fees are entered on the debit side of the bankaccount, and are credited to the entrance fees account.

• Membership fees, most members of clubs pay theirmembership fees, also referred to as subscriptions, on time.

• Some members may be in arrears with their fees which couldlater become irrecoverable, while other members pay their

fees in advance.• If the double-entry system and accrual basis of accounting

are applied, only the income receivable from membershipfees for a particular financial year must be taken into accountas revenue for that year



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MEMBERSHIP FEES continues

• Amounts that are in arrears must be added to themembership fees for that year and any fees received inadvance must be subtracted.

• Separate accounts must be opened for fees in arrears and

fees received in advance.

• The membership fees in arrears account indicates theincome in arrears and must be shown under current assets,as part of trade and other receivables, on the statement offinancial position.

• The membership fees received in advance account isreflected as current liability under trade and other payableson the payables on the statement of financial position.



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COMPARISON

INCOME & EXPENDITURE STATEMENT RECEIPTS & PAYMENTS STATEMENT

• Shows the total income and

expenditure for the period,

even if not yet received or

paid

• Shows only actual cash

receipts and payments

• Indicates the result of the

financial periods transactions

by showing a surplus or a

deficit

• Shows the amount of cash on

hand at the beginning and at

the end of a financial period,

but does not indicate a

surplus or deficit.

• Receipts and payments of a

capital nature are not

brought into account

• Receipts and payments of a

capital nature are included.



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TAKE NOTE

• The outstanding and prepaid income and/or expenditure atthe beginning and at the end of the period should be takeninto account when preparing the income and expenditurestatement. These prepaid or arrear items at the end of theperiod should also be shown on the statement of financial

position in the usual way• An Income and Expenditure statement is intended to

determine the surplus or deficit for an accounting period.

• The Income & Expenditure statement is very similar to astatement of comprehensive income

• In addition you must be able to prepare Membership FeesAccount in the General Ledger & Income and ExpenditureStatement . Refer to Question 5 of Tutorial letter 102.



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MUST DO EXERCISES

PREVIOUS QUESTION PAPERS

• QUESTION 4 (OCT-NOV 2013)

• QUESTION 2 (MAY-JUN 2014)

• QUESTION 4 (MAY-JUN 2015)

•

QUESTION 4 (OCT-NOV 2015)

TUTORIAL LETTER 102

• QUESTION 5

STUDY GUIDE• COMPREHENSIVE EXAMPLE (PAGE 322-323)

• REVISION EXERCISE 1 (PAGE 328-329)

• REVISION EXERCISE 2 (PAGE 334-335)



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TICKBOX

ASSESSMENT TIME!!!!NO. TOPIC STATUS TICK

1 STUDY UNIT 1-5 DONE

2 STUDY UNIT 6 DONE

3 STUDY UNIT 7 DONE4 STUDY UNIT 8 DONE

5 STUDY UNIT 9 DONE

6 STUDY UNIT 13 DONE

7 STUDY UNIT 16-NON-PROFIT ENTITIES DONE

8 ASSIGNMENT NO. 1 DONE

9 ASSIGNMENT NO. 2 PARTIAL

DONE



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INSPIRATIONAL QUOTES • In order to succeed, we must first believe that we

can. Nikos Kazantzakis • Things do not happen. Things are made to happen.

John F. Kennedy

• You can't cross the sea merely by standing and

staring at the water. Rabindranath Tagore

• Good, better, best. Never let it rest. 'Till your good is

better and your better is best. St. Jerome

• Arriving at one goal is the starting point to another.

John Dewey

• Set your goals high, and don't stop till you get

there. Bo Jackson 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 12


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WELL DONE!

RISE & SHINE

THANK YOU


Documents

FAC1502 Non-profit Entities Notes