CBSE Class 12 Accountancy Accounting for Not for Profit Organisation MCQs Set C

Question: GSC Ltd. purchased machinery of Rs. 10,00,000 issuing a cheque of Rs. 2,50,000 and 10% Debentures of Rs. 7,50,000. ln the Cash Flow Statement, the transaction will be shown as
a) Outflow under Investing Activity Rs. 10,00,000, inflow under Financing Activity as Receipt for Debentures Rs. 7,50,000.
b) Outflow under investing Activity Rs. 2,50,000.
c) Inflow of Rs. 7,50,000 as Financing Activity.
d) None of the options.
Answer: b

Question: At the beginning of an accounting year a club has assets of Rs. 19,000 and liabilities of Rs.5,000. Rs. 1,800 is the debit balance of the income & expenditures account. The opening capital fund is
a) Rs. 18,000
b) Rs.11,200
c) Rs.15,800
d) Rs. 24,800
Answer: c

Question: For the calculation of cash flow from operating activities, payments and receipts shown in Profit & Loss account are converted into payments and receipts actually in cash by eliminating
a) Non-cash revenue from the revenue earned and Non-cash expenses from expenses incurred
b) Non-cash revenue from the revenue earned
c) Non-cash expenses from expenses incurred
d) None of the options
Answer: a

Question: While preparing Cash Flow Statement, non-cash items and non-operating items are not required to be adjusted under________
a) Direct method
b) Indirect method
c) Average method
d) All of the options
Answer: a

Question: If debit side of receipt and payment account exceeds the credit side, it represents:
a) Deficit balance
b) Surplus Balance
c)Cash at Bank
d) Bank Overdraft
Answer: c

Question: Subscription received in advance during the accounting year is
a) an income
b) an expense
c) Asset
d) Liability
Answer: d

Question:Receipts and Payments Account is a
a) Real Account.
b) Nominal Account.
c) Personal Account.
d) Revenue Account
Answer: a

Question: Cash Credit is concerned with __
a) Financing Activities
b) Investing Activities
c) Operating Activities
d) Cash and Cash Equivalents
Answer: a

Question: Which of the following is not a source of finance
a) Fixed Assets
b) Debentures
c) Bank Overdraft
d) Bank Loan
Answer: a

Question: Limitations of Cash Flow Statementv are
a) All of the options
b) Cash flow statement does not consider non-cash item
c) Cash flow statement cannot replace fund flow statement or income statement
d) It cannot be used for the purpose of comparison over a period of time
Answer: a

Question: An example of cash flow from investing activity is :
a) Issue of debenture
b) Repayment of long-term loan
c) Purchase of raw materials for cash
d) Sale of investment by non-financial enterprise.
Answer: d

Question: Under Cash Flow from Operating Activities incorporates are
a) Paid for operating costs
b) Cash received from customers
c) Paid to suppliers
d) All of the options
Answer: a

Question: Capital fUnd is calculated:
a) Income-Expenditure
b) Assets Liabilities
c) Capital + Liabilities
d) None of the options
Answer: b

Question: Subscription received in advance during the current year is
a) an income.
b) an asset.
c) a liability.
d) None of the options.
Answer: c

Question: Identify the best definition of planning.
a) A process in which plans are formulated, carried out and controlled
b) The core activity of planners and planning departments
c) Devising ways of achieving objectives
d) Setting an organization’s objectives and means of reaching them.
Answer: d

Question: Amount received from the sale of old furniture by a club is treated as:
a) Revenue Receipt
b) Capital Receipt
c) Asset
d) liability
Answer: b

Question: Which of the following is directly added to the capital fund on the liabilities side of the Balance Sheet?
a) Life membership fees
b) Legacies
c) Entrance Fees
d) All of the options
Answer: a

Question: Subscription received in advance during the accounting year is
a) an income
b) an expense
c) Asset
d) Liability
Answer: d

Question: Income & Expenditure Account is based on
a) Cash Accounting
b) Accrual Accounting
c) Government Accounting
d) Management Accounting
Answer: b

Question: The Receipt and Payment account of a Non- Profit Organisation is a
a) Nominal Account
b) Real Account
c) Income Statement Account
d) Financial Statements
Answer: b

Question: If a General Donation of huge amount is received by a school, that donation is treated as :
a) Revenue Receipt (Income)
b) Capital Receipt (Liability)
c) Assets
d) Earned Income
Answer: b

Question: Interest paid by an investment company will come under which kind of activity while preparing cash flow statement?
a) Cash Flow from Operating Activities
b) Cash Flow from Investing Activities
c) Cash Flow from Financing Activities
d) No Cash Flow
Answer: a

Question: The opening balance of the Prize fund of a sports club was Rs.6,400. Further donations towards this fund received during the accounting year amounted to Rs.4,300. During the year, Rs. 3,500 was spent on prizes and Rs. 400 was received as interest on investment of the Prize Fund. The closing balance of the Prize fund is
a) Rs. 1,900
b) Rs.10,200
c) Rs.10,600
d) Rs.7,600
Answer: d

Question: A non-profit organization received ₹10,000 as the entrance fee of a new member. If 20% of the fee has to be capitalised, what is the amount of fee needs to be shown in the income and expenditure account?
a) ₹9000
b) ₹8000
c) ₹2000
d) ₹5000
Answer: b

Question: At the beginning of an accounting year a club has assets of Rs. 19,000 and liabilities ofRs.5,000. Rs. 1,800 is the debit balance of the income & expenditures account. The opening capital fund is
a) Rs. 18,000
b) Rs.11,200
c) Rs.15,800
d) Rs. 24,800
Answer: c

Question: Which should be considered as capital receipt of a club
a) Donation
b) sale of newspaper
c)) sale of bar items
d) sale of furniture
Answer: d

Question: The opening balance of the Prize fund of a sports club was Rs.6,400. Further donationstowards this fund received during the accounting year amounted to Rs.4,300. During theyear, Rs. 3,500 was spent on prizes and Rs. 400 was received as interest on investment ofthe Prize Fund The closing balance of the Prize fund is
a) Rs. 1,900
b) Rs.10,200
c) Rs.10,600
d) Rs.7,600
Answer: d

Question: If Salaries debited to Income & Expenditure account is ₹54,000 after adjusting prepaid salaries at the beginning of the year ₹2,000, outstanding salaries of previous year ₹6,000 and outstanding salaries of current year ₹9,000, then Salaries paid during the current year will be:
a) ₹59,000
b) ₹63,000
c) ₹49,000
d) ₹37,000
Answer: c

Question: Principal revenue generating activities of an enterprise are called as
a) Operating activities
b) Financing activities
c) Investing activities
d) All of the options
Answer: a

Question: Which should be considered as capital receipt of a club
a) Donation
b) sale of newspaper
c) sale of bar items
d) sale of furniture
Answer: d

Question: Second hand furniture worth Rs. 6,000 was purchased It was repaired for Rs.600 andinstalled by workmen to whom Rs. 200 was paid as wages. The furniture should becapitalised for
a) Rs.6,200
b) Rs.6,800
c) Rs. 6,600
d) Rs. 6,000
Answer: b

Question: The excess of assets over liabilities in non-trading concerns is termed as:
a) Capital Fund
b) Capital
c) Profit
d) Net Profit
Answer: a

Question: Which of the following is not a revenue receipt?
a) Donations for Tournament
b) Government Grants
c) Subscriptions
d) Entrance Fees
Answer: a

Question: XYZ club has a bar that maintains a separate trading account for its trading activities.Which of the following is the treatment of profit or loss on bar trading activities?
a) Profit or loss is directly shown in the Balance Sheet
b) Profit or loss is to be presented in income and expenditure account
c) Profit and loss is credited in income statement.
d) Profit or loss is added to accumulated fund
Answer: b

Question: Fixed assets fund is
a) Endowment Fund
b) Current restricted Fund
c) Current unrestricted fund
d) Meant for accounting of asses and depreciation
Answer: d

Question:Subscription received but not yet earned is considered as
a) Asset
b) Liability
c) Income
d) Expenditure
Answer: b

Question: Endowment Fund should be treated as:
a) A Liability
b) A Revenue Receipts
c) An Income
d) None of the options
Answer: a

Question: Which of the following is an example of not-profit-organisation:
a) Public hospitals
b) Corporations
c) Audit firm
d) Insurance companies
Answer: a

Question: In regard to Rent expenses paid in advance of a non- profit organisation which of the following classification is correct
a)Expense
b) Liability
c) Equity
d) Assets
Answer: d

Question: Subscription received in cash during the year amounted to Rs.5,00,000; subscription outstanding at the end of previous year was Rs.20,000 and outstanding at the end of current year was Rs.25,000. Subscription received in advance for next year was Rs. 8,000 and received in advance during previous year was Rs.7,000. The amount credited to Income & Expenditure Account will be :
a) Rs.5,04,000
b) Rs.5,06,000
c) Rs.4,96,000
d) Rs.4,94,000
Answer: a