Select from the following the final accounts, that a Not-for-Profit O…

Select from the following the final accounts, that a Not-for-Profit Organisation is not required to prepare.

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Cash Flow Statement

The final accounts of a not-for-profit organisation are the Receipt and Payment Account, the Income and Expenditure Account and the Balance Sheet. A cash flow statement is required of companies under AS-3; it is not one of the final accounts of a not-for-profit organisation.

Option (1) Receipt and Payment Account — Prepared by it. It summarises the cash book of the year.

Option (2) Income and Expenditure Account — Prepared by it. It shows the surplus or deficit of the year.

Option (4) Balance Sheet — Prepared by it. It shows the financial position at the year end.

Note: This question is from the pre-rationalised NCERT book for items Option (1), Option (2) and Option (4) (the final accounts of a not-for-profit organisation). The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.

NCERT (Pre-rationalised edition):
Accounting Records of Not-for-Profit Organisations

Extract from the NCERT textbook

NCERT (2026-27 edition):
Financial Statements of a Company – “… Financial Statement of companies are prepared following the accounting standards prescribed in the companies Act, 2013. Accounting Standards are notified under section 133 of the Companies Act, 2013 vide Accounting Standards Rules, 2006 and are mandatory in nature. Companies Act, 2013 also specifies that if the accounting standards are not followed, financial statements will not be true and fair, which is a quality of financial statement. Financial Statements are defined in Companies Act, 2013 (Section 2 (40)] and includes Cash Flow Statement prepared in accordance with Accounting Standard- 3 (AS-3)- Cash Flow Statement.”