Page 65 - MAZOO EBOOK 1_Neat

1.10 Financial statements of a not for profit organization

Distinction between not for profit making organization and profit making organization

The aim of profit making organizations is to maximize profits and forward these profits to the

company's owners and shareholders.

Not for profit organizations aim to provide society’s needs. Non-profit organizations have no

owners. Instead of maximizing profits, which means maximizing revenues while minimizing

costs, they are more concerned with ensuring the revenue is greater than costs. (ht65).

Nature of receipts and payments account

Receipts and Payments Account is a real account showing summary of all cash and bank

transactions occurred during the accounting year. It is prepared at the end of the accounting

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