Where a non-profit organization prepares the accounts using accruals basis of reporting, the statement showing how well the organization is doing is the _________
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Correct Answer: Option C
Explanation:
A non-profit organization (e.g., clubs, societies, charities) that uses the accrual basis of accounting prepares an Income and Expenditure Account to show how well it is performing during a given period.
This account:
Is similar to a profit and loss account in a for-profit business.
Matches income earned (whether received or not) with expenses incurred (whether paid or not).
Shows a surplus or deficit for the period — essentially the organization's version of "profit" or "loss".
A non-profit organization (e.g., clubs, societies, charities) that uses the accrual basis of accounting prepares an Income and Expenditure Account to show how well it is performing during a given period.
This account:
Is similar to a profit and loss account in a for-profit business.
Matches income earned (whether received or not) with expenses incurred (whether paid or not).
Shows a surplus or deficit for the period — essentially the organization's version of "profit" or "loss".