GROUP 3EFAC 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 MENU • • • • • • • INTRODUCTION BACKGROUND PURPOSE ENTRANCE & MEMBERSHIP FEES MUST DO EXERCISES TICK-BOX INSPIRATIONAL QUOTES 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 2 . people may imitate it” Albert Schweitzer 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 3 . 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.INTRODUCTION Dear Honourable Members Go through the previous question papers and check how the questions in exam would look like. Easy marks!!! Kind regards Mr. Ramashau Aluwani UNISA E-Tutor: FAC 1502 (Group 3E) “Do something wonderful. and not to pursue financial gain. • Its objective is not to distribute profits to the members but to use the profits in order to achieve the stated goal. • Revenue may be acquired from a variety of sources. donations. • Members of a non-profit organisation can therefore not claim the same rights in the entity. and not ownership.BACKGROUND • Non-profit organisation can be defined as an economic entity which has the legitimate goal of furthering certain interests of the community. fund-raising projects. bars. • Such an entity is oriented to render a service to its members. • Other source of income may include: tuck shops. restaurants. is acquired through the payment of membership fees. such as membership fees. • These entities can range from informal social clubs. bequests and government subsidies. 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 4 . it means that surpluses should be used for the benefit of the members of these entities.PURPOSE • The main purpose of non-profit entities is to render a service to their members or the community. • Non-profit does not mean they may not trade or make a profit. 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 5 . is usually acquired through the payment of an entrance fee and annual subscriptions. • Membership. not ownership. • Membership fees. • If the double-entry system and accrual basis of accounting are applied. most members of clubs pay their membership fees. only the income receivable from membership fees for a particular financial year must be taken into account as revenue for that year 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 6 . while other members pay their fees in advance. and are credited to the entrance fees account. also referred to as subscriptions. on time.ENTRANCE FEES & MEMBERSHIP FEES • Entrance Fees are payable by prospective members when they apply for membership of a club. • Entrance Fees are entered on the debit side of the bank account. • Some members may be in arrears with their fees which could later become irrecoverable. 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 7 . on the statement of financial position. • Separate accounts must be opened for fees in arrears and fees received in advance.MEMBERSHIP FEES continues • Amounts that are in arrears must be added to the membership fees for that year and any fees received in advance must be subtracted. • The membership fees received in advance account is reflected as current liability under trade and other payables on the payables on the statement of financial position. • The membership fees in arrears account indicates the income in arrears and must be shown under current assets. as part of trade and other receivables. COMPARISON INCOME & EXPENDITURE STATEMENT RECEIPTS & PAYMENTS STATEMENT • Shows the total income and • Shows only actual cash expenditure for the period. deficit but does not indicate a surplus or deficit. UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 8 . receipts and payments even if not yet received or paid • Indicates the result of the • Shows the amount of cash on financial periods transactions hand at the beginning and at by showing a surplus or a the end of a financial period. • Receipts and payments of a capital nature are not brought into account 2016-04-09 • Receipts and payments of a capital nature are included. TAKE NOTE • The outstanding and prepaid income and/or expenditure at the beginning and at the end of the period should be taken into account when preparing the income and expenditure statement. These prepaid or arrear items at the end of the period 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 a statement of comprehensive income • In addition you must be able to prepare Membership Fees Account in the General Ledger & Income and Expenditure Statement . 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 9 . Refer to Question 5 of Tutorial letter 102. 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) 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 10 . TOPIC STATUS 1 STUDY UNIT 1-5 DONE a 2 STUDY UNIT 6 DONE a 3 STUDY UNIT 7 DONE a 4 STUDY UNIT 8 DONE a 5 STUDY UNIT 9 DONE a 6 STUDY UNIT 13 DONE a 7 STUDY UNIT 16-NON-PROFIT ENTITIES DONE a 8 ASSIGNMENT NO. 2 PARTIAL DONE a 2016-04-09 TICK UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 11 . 1 DONE a 9 ASSIGNMENT NO.TICKBOX ASSESSMENT TIME!!!! NO. better. Rabindranath Tagore • Good. John Dewey • Set your goals high. best. Kennedy • You can't cross the sea merely by standing and staring at the water. we must first believe that we can. Nikos Kazantzakis • Things do not happen. John F. Bo Jackson 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 12 .INSPIRATIONAL QUOTES • In order to succeed. and don't stop till you get there. 'Till your good is better and your better is best. Things are made to happen. St. Never let it rest. Jerome • Arriving at one goal is the starting point to another. WELL DONE! RISE & SHINE THANK YOU 2016-04-09 UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E 13 .