Chapter 1: Not For Profit Organisations (NPOs)
Questions and Answers - (Part 1)
CBSE Class 12: Accountancy
Q1: What is a Not For Profit Organisation (NPO)?
Answer: NPO's are voluntary organisations founded with objective of promoting art, culture, education and other social and charitable purpose without any intention of earning profit. They work for self interest.
e.g. Hospitals,colleges,schools,universities,religious organisations, culture institutions, professional accounting bodies i.e. ICAIICSI etc are generally run by NPOs.
Q2: What are the salient features of NPOs?
Answer:
(i) Service motive
(ii) Profit is not the criterion.
(iii) Surplus not distributed among its members.
(iv) Separate entity.
(v) Unique names connect their working.
(vi) Managed by elected persons.
(vii) Major funds in the form of contribution and donations, etc.
Q3: Distinguish between Not for Profit Organisation and Profit Organisation.