Non Trading institution prepare:______________?
Correct answer: C. Income and Expenditure Account
- A. profit and loss account
- B. Manufacturing account
- C. Income and Expenditure Account
- D. Cost of good sold
Explanation
A non-trading institution does not primarily calculate profit from buying and selling goods, so it prepares an Income and Expenditure Account to determine its surplus or deficit. A profit and loss account is associated with profit-seeking businesses.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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