Accountancy Part AAccounts for Non Profit Organsiation

Identify the Account that shows Surplus or Deficit as the Balance at…

Identify the Account that shows Surplus or Deficit as the Balance at the end of the accounting period.

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Income and Expenditure Account

The Income and Expenditure Account of a not-for-profit organisation is like a profit and loss account. It takes only the revenue items of the year on accrual basis, so its balance is the surplus (income more than expenditure) or deficit (expenditure more than income).

Option (1) Receipt and payment Account — Incorrect. It is a summary of cash and bank transactions; its balance is the closing cash and bank balance.

Option (3) Cash Book — Incorrect. Its balance is the cash or bank balance, not a surplus or deficit.

Option (4) Statement of Affairs — Incorrect. It lists assets and liabilities to find the capital fund at a date; it is not an account of the period’s income.

Note: This question is from the pre-rationalised NCERT book. 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):
Income and Expenditure Account – “It is the summary of income and expenditure for the accounting year. It is just like a profit and loss account prepared on accrual basis in case of the business organisations. It includes only revenue items and the balance at the end represents surplus or deficit.”