WHAT IS ACCUMULATED FUND ACCOUNT?


THE ACCUMULATED FUND ACCOUNT

Not-for-profit organisations do not have owners.  There is no capital contribution in such organisations.  It follows then that a capital account would not exist.  However, funds are required in order to start such organisations.  Such funds whether coming from government grants or members entrance fees are credited to an accumulated fund account.   In any accounting period after preparation of an Income and Expenditure Statement, the excess of income over expenditure contributes towards the accumulated fund. Excess of expenditure over income draws against the fund.

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