WHERE A NON-PROFIT MAKING ORGANIZATION PREPARES THE ACCOUNT USING ACCRUALS BASIS OF REPORTING, THE STATEMENT SHOWING HOW WELL THE ORGANIZATION IS DOING IS THE

• A. appropriation account
• B. balance sheet
• C. income and expenditure account ✓
• D. receipts and payment account

The answer to the question is: C. income and expenditure account

When a non-profit organization prepares its accounts using the accruals basis of reporting, the statement that shows how well the organization is doing is the income and expenditure account. The income and expenditure account is a financial statement that summarizes the organization’s revenues and expenses over a specific period, typically a fiscal year. It provides a detailed breakdown of the organization’s income and expenditure, allowing stakeholders to assess its financial performance and sustainability.

The income and expenditure account is an essential tool for non-profit organizations as it helps them track their financial activities and determine whether they have generated a surplus or deficit during the reporting period. This statement provides valuable insights into the organization’s operational efficiency, fundraising efforts, and overall financial health. By presenting a comprehensive overview of the organization’s financial transactions, the income and expenditure account enables stakeholders to make informed decisions regarding resource allocation, budgeting, and strategic planning.

In summary, when a non-profit making organization prepares its accounts using the accruals basis of reporting, the statement that shows how well the organization is doing is the income and expenditure account.