A receipt and payment account is a summary of all receipts and payments under proper head, which take place during the accounting period. We can understand, in the cashbook similar type of transactions are summarized and their total amount is posted to the receipt account and payment account under the proper title.
The basic objective of NPO organizations is to provide social services to those who either have less purchasing power or no purchasing power for utilizing those services. These institutions are financed by donation whether local or international donor agencies for example UNICEF, WFP, FFF Jordan etc.
The process of recording of transaction in the journal is called passing or journalizing the entry. A general journal is the first accounting record. It is just like a basket in which all accounting transactions are recorded in order of their occurrence. It is called the original book of entry. Journalizing the entries is the first step in the accounting cycle.
The financial data generated by a large business enterprise is enormous. The method of recording, the data should be such that retrieval may be quick and the information provided is timely and reliable for economic decision-making.
The business entity concept means that business is separate entity apart from its owners. The accounting records are maintained for the business entity. It is important in order to evaluate the performance of the business. A business entity may have many accounting entities in it.
An accountant records a transaction in his book of accounts, first he must understand which transaction should be debited and which should be credited. To perform such accounting transactions, a clear idea of different classes of accounts is very important.
The International Accounting Standards Board (IASB) is an autonomous body. The main function of IASB is to develop and approve IFRSs. The board came in to being in 2001 and replaced the IASC. The IFRSs is an independent body formed in 2000 to monitor the IASB.
Like accounting equation, special terms are used when describing something in accounting. When resources put into business by the owner are called Capital or Owner Equity. Actual economic resources owned by the business are called assets. Owner supplied the resources, the accounting equation will be:, Assets = Capital/O.E + Liabilities