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A Not-for-Profit organisation prepares which account in place of a Profit & Loss A/c?
ATrading A/c
BReceipts and Payments A/c
CIncome and Expenditure A/c
DBalance Sheet
Answer & Solution
Correct answer: C. Income and Expenditure A/c
1. NFP organisations focus on surplus/deficit rather than profit.
2. Income and Expenditure Account is prepared on an accrual basis and shows surplus or deficit.
3. Receipts and Payments is a cash-based summary; Trading and Balance Sheet serve other purposes.
4. Hence (C) replaces the P&L in an NFP context.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 2 "Accounts of 'Not for Profit' Concerns", §2.1 ¶§2.1_