Question

List any four items that are considered as Capital items while preparing financial statements of a Not-for-Profit Organisation.

Answer 1

In a Not-for-Profit Organization (NPO), capital items refer to the assets or items that are intended for long-term use and are not intended for immediate sale. These items are typically capitalized in the financial statements and not expensed immediately.

Here are four examples of capital items considered while preparing the financial statements of a Not-for-Profit Organization:

1. Land and Buildings: Real estate that is used for the NPO's activities, such as office space or community centers, is considered a capital item.

2. Furniture and Fixtures: Long-lasting items like tables, chairs, desks, and other office equipment are capitalized as they are used for operations over a long period.

3. Vehicles: Any vehicles purchased by the organization for transportation purposes, such as cars, vans, or trucks, are considered capital items.

4. Equipment and Machinery: Items like computers, printers, medical equipment, and any other machinery or tools used in the organization's activities for an extended period are considered capital items.

These capital items are typically recorded as assets on the balance sheet and are depreciated over time based on their useful life.