Balance Sheet of Non-Trading Concerns

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Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on April 13, 2023

The balance sheet in a non-trading concern is prepared in a similar way to the approach followed in a trading concern. In both cases, the balance sheet can be prepared in account form or report form.

If only the receipt and payment account is available, it is not possible to have a balance sheet. This is because complete information regarding the assets and liabilities will not be available from the books.

Example

A summary is given below of cash transactions for the GB Hockey Club for the year ended on 31 December 2017.

GB Hockey Club Cash Transactions

In this example, the club owns buildings amounting to $90,000 and furniture of $8,400, as of 1 January 2017

Required: Prepare an income and expenditure account and balance sheet for the business as of 31 December 2017.

Solution

GB Hockey Club Income and Expenditure Account
GB Hockey Club Income and Balance Sheet

W-1:

Calculations for Working Capital

Balance Sheet of Non-Trading Concerns FAQs

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About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.