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Definition and Explanation of Non-profit Making Organizations:

People Join together for a number of reasons in voluntary organization: for mutual entertainment, for protection, or for professional reasons. There are sports clubs, trade unions, consumer societies, political associations, and many more. The degree of richness of any society lies partly in the variety of the voluntary organization it promotes.

Non-profit making organization are those, which do not buy/manufacture and sell goods and whose primary object is not to earn profit. Their object is to do good to the society through welfare activities. Examples of non-profit organizations are clubs, schools, colleges, Hospitals, Libraries etc. These organizations are also called non-trading concerns.

From the book-keeping point of view the aim of such organizations is the pursuit of some interest other than financial benefit, so these may be termed as Non-Profit making Organizations. Although these organizations are not meant for profit earning, yet organizations of this sort must have funds to promote their activities, and these funds must be honestly accounted for. For example in case of a club, the official elected for this purpose is called the "Treasurer", one of the key figures on the committee which is elected to run the club. The others are the secretary, responsible for organizing the club's activities, and the chairperson, or president, who controls the meetings.

The treasure's functions are to collect subscriptions, disburse such funds as are needed in the course of the activities, and report to the members when required, but especially at the annual General Meeting—an important occasion in the club's life. At this meeting the activities of the club are reviewed, criticisms are voiced, or praise is accorded the committee.

Relevant Articles:

» Definition and Explanation of No-profit Organizations
» Receipts and Payments Account
» Difference Between Cash Book and Receipt and Payment Account
» Income and Expenditure Account
» Peculiar Items of A Non-profit Seeking Concerns
» Difference between Receipt and Payment Account and Income and Expenditure Account




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