An Income and Expense Account is a standard accounting document that is produced to show a summary of all the money paid in and out of the organizations accounts during the financial year.

• The statement of financial activities (SOA) shows the nonprofit organization’s income and expenses for a specific period of time.
• The report reflects the changes to an organization’s net assets resulting from income and expenses that occur during the current fiscal year
• The income account of charity includes the income earned from charitable activities involve income earned both from the supply of goods or services under contractual agreements and from performance related grants.

income earned from charitable activities includes but is not limited to

• • The sale of goods and services as part of the charitable activities of the charity (also known as primary purpose trading),whether the sale is intended to make a profit or is at or below cost;
  • Contractual payments from government or public authorities and other parties which fund the provision of particular goods or services, for example the provision of care;
  • The sale of goods or services made or provided by the beneficiaries of the charity;
  • Performance-related grants where the income is conditional on delivering certain levels or volumes of a service or supply of goods;
  • Ancillary trades connected to primary purpose trading; and
  • The letting of non-investment property
• Income earned from other activities includes income earned from both trading activities to raise funds for the charity and income from fundraising events income must be presented gross in the Statement of financial Activities before the deduction of any costs incurred.

Amount of all the activities should be aggregated to provide the analysis of income in the notes of the accounts are

• • Donations like some organizations received donations as gift, grants or legacies.
  • Income earned from charitable activities, identifying the nature of activities undertaken and income produced.
  • Income earned from other trading activities.
• The cost of raising funds includes all the expenses incurred by a charity to raise funds for its charitable purpose and activities.
• In expense accounts of charity involves the cost of raising funds that includes the cost incurred in
  • Seeking donations, grants and legacies;
  • Operating membership schemes and social lotteries;
  • Staging events including the performance fees, license fees and other related costs;
  • Contracting with agents to raise funds on behalf of the charity;
  • Operating charity shops selling donated and/or bought in goods;
  • Operating a trading company undertaking non-charitable trading activities
  • Advertising, marketing and direct mail materials, including publicity costs not associated with educational material designed wholly or mainly to further the charity’s purposes and
  • Investment management costs.

The expense accounts of charity also includes investments costs incurred in

• • Portfolio management.
  • Obtaining Investment advice.
  • Administration of investments.
  • Cost of licensing an intellectual property.
  • Rent collection for properties and their repair and maintenance.
• Other expense in expense account of charities includes a loss on the disposal of a tangible fixed asset held for charity’s own use.