GROUP 3E

FAC 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

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

INTRODUCTION
Dear Honourable Members
Go through the previous question papers and check how the
questions in exam would look like. 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.
Easy marks!!!
Kind regards
Mr. Ramashau Aluwani
UNISA E-Tutor: FAC 1502 (Group 3E)
Do something wonderful, people may imitate it Albert
Schweitzer
2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

BACKGROUND
Non-profit organisation can be defined as an economic entity which has
the legitimate goal of furthering certain interests of the community.
Its objective is not to distribute profits to the members but to use the
profits in order to achieve the stated goal.
Such an entity is oriented to render a service to its members, and not to
pursue financial gain.
These entities can range from informal social clubs.
Revenue may be acquired from a variety of sources, such as membership
fees, and not ownership, is acquired through the payment of membership
fees.
Other source of income may include: tuck shops, bars, restaurants,
donations, fund-raising projects, bequests and government subsidies.
Members of a non-profit organisation can therefore not claim the same
rights in the entity.

2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

PURPOSE
The main purpose of non-profit entities is to
render a service to their members or the
community.
Membership, not ownership, is usually acquired
through the payment of an entrance fee and
annual subscriptions.
Non-profit does not mean they may not trade or
make a profit, it means that surpluses should be
used for the benefit of the members of these
entities.
2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

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, and are credited to the entrance fees account.
Membership fees, most members of clubs pay their
membership fees, also referred to as subscriptions, on time.
Some members may be in arrears with their fees which could
later become irrecoverable, while other members pay their
fees in advance.
If the double-entry system and accrual basis of accounting
are applied, 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

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.
Separate accounts must be opened for fees in arrears and
fees received in advance.
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, on the statement of
financial position.
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.
2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

COMPARISON
INCOME & EXPENDITURE STATEMENT

RECEIPTS & PAYMENTS STATEMENT

Shows the total income and Shows only actual cash

expenditure for the period,
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,
deficit
but does not indicate a
surplus or deficit.

Receipts and payments of a

capital nature are not
brought into account
2016-04-09

Receipts and payments of a

capital nature are included.

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

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 . Refer to Question 5 of Tutorial letter 102.
2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

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)
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UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

10

TICKBOX
ASSESSMENT TIME!!!!
NO.

TOPIC

STATUS

STUDY UNIT 1-5

DONE

STUDY UNIT 6

DONE

STUDY UNIT 7

DONE

STUDY UNIT 8

DONE

STUDY UNIT 9

DONE

STUDY UNIT 13

DONE

STUDY UNIT 16-NON-PROFIT ENTITIES

DONE

ASSIGNMENT NO. 1

DONE

ASSIGNMENT NO. 2

PARTIAL
DONE

2016-04-09

TICK

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

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INSPIRATIONAL QUOTES
In order to succeed, we must first believe that we
can. Nikos Kazantzakis
Things do not happen. Things are made to happen.
John F. Kennedy
You can't cross the sea merely by standing and
staring at the water. Rabindranath Tagore
Good, better, best. Never let it rest. 'Till your good is
better and your better is best. St. Jerome
Arriving at one goal is the starting point to another.
John Dewey
Set your goals high, and don't stop till you get
there. Bo Jackson
2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

12

WELL DONE!
RISE & SHINE
THANK YOU
2016-04-09

UNISA E-TUTOR: RAMASHAU FAC1502-S1-16 GROUP 3E

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