Although Income and Expenditure Account prepared by a No-for-Profit Organisation andProfit and Loss Account prepared by an enterprise are prepared on the same principles of accounting why is it that in the case of Not- for-Profit Organisation it is termed as incomeand expenditureAccount.

Although Income and Expenditure Account prepared by a No-for-Profit Or

1.	Although Income and Expenditure Account prepared by a No-for-Profit Organisation andProfit and Loss Account prepared by an enterprise are prepared on the same principles of accounting why is it that in the case of Not- for-Profit Organisation it is termed as incomeand expenditureAccount.
Answer» Solution :Both Income and EXPENDITURE Account and Profit and loss Account are prepared on accrual basis of ACCOUNTING . But a Not-for-profit Organisation is not established with an AIM to EARN profit but is established for welfare purposes. On the other hand , a BUSINESS is established with an aim to earn profit. Therefore statement prepared by a Not-for-Profit Oraganisation is termed as Income and Expenditure Account and statement prepared by a business is termed as profit and Loss Account.

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Although Income and Expenditure Account prepared by a No-for-Profit Organisation andProfit and Loss Account prepared by an enterprise are prepared on the same principles of accounting why is it that in the case of Not- for-Profit Organisation it is termed as incomeand expenditureAccount.

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