CBSE Class 12 Accountancy Accounting for Not for Profit Organisation MCQs Set 04

Question: Salaries payable for the current year amount to Rs. 8,500 at the end of the year.Outstanding salaries amounted to Rs. 300. Salaries paid in advance last year pertaining tothe current year amounted to Rs.500. Prepaid salaries for the next year amount to Rs.250.total amount paid for salaries during the year is
a) Rs.7,550
b) Rs.7,500
c) Rs. 7,950
d) Rs.6,500
Answer: c

Question: Which of the following is the accounting equation for a non-profit organisation?
a) Asset= Capital + Liabilities
b) Capital+ Liabilities= Assets
c) Accumulated Fund+ Liabilities= Assets
d) Liabilities= Assets + Accumulated Fund
Answer: c

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: Salaries payable for the current year amount to Rs. 8,500 at the end of the year. Outstanding salaries amounted to Rs. 300. Salaries paid in advance last year pertaining to the current year amounted to Rs.500. Prepaid salaries for the next year amount to Rs.250. total amount paid for salaries during the year is
a) Rs.7,550
b) Rs.7,500
c) Rs. 7,950
d) Rs.6,500
Answer: c

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

Question:The control of non trading concern rest in the hand of
a) Directors
b) managing Agents
c) Governing body
d) Promoters
Answer: c

Question: An example of Cash Flows from Financing Activity is :
a) Credit Revenue from Operations
b) Cash receipts from issue of shares
c) Sale of Investments
d) Interest Received
Answer: b

Question: Receipt & Payment Account shows
a) A debit balance
b) A credit balance
c) Surplus or deficit
d) Capital fund
Answer: d

Question: On What basis receipts and payments account is made
a) Cash basis
b) Accrual basis
c) Both Cash & Accrual basis
d) None of the options
Answer: b

Question: Which of the following is regarded as apt to show purchase of fixed asset for a nonprofit organisation
a) Income & Expenditure Account
b) Profit & Loss Account
c) Balance Sheet
d) None of the options
Answer: c

Question: Donations received for special purpose should be
a) Credited to a separate fund account and shown in the Balance Sheet
b) Treated as revenue
c) treated as revenue unless the amount is large
d) Not recorded at all
Answer: a

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

Question: Donations received for special purpose should be
a) Credited to a separate fund account and shown in the Balance Sheet
b) Treated as revenue
c) treated as revenue unless the amount is large
d) Not recorded at all
Answer: a

Question: Receipt & Payment Account shows
a) A debit balance
b) A credit balance
c) Surplus or deficit
d) Capital fund
Answer: a

Question: Which of the following is to be recorded in an income and Expenditure Account
a) Purchase of a fixed Asset
b) Capital Expenditure incurred on a fixed asset
c) Profit on the sale of a fixed asset
d) Sale of a fixed asset
Answer: c

Question: In the receipts and payments account the receipts from subscriptions would appear at ____________.
a) Rs. 700
b) Rs. 800
c) Rs. 900
d) Rs. 1,000
Answer: d

Question: Which of the following is not a not-for-profit organisation?
a) College
b) Sports Club
c) SBI Bank
d) Hospital
Answer: c

Question: Deficit balance can be shown in balance Sheet as:
a) Liability
b) Assets
c) Owner’s equity
d) None of the options
Answer: b

Question: Receipt and Payment account includes
a) Revenue items
b) Cash items
c) Revenue & Cash items
d) None of the options
Answer: c

Question: Receipt and Payment account includes
a) Revenue items
b) Cash items
c) Revenue & Cash items
d) None of the options
Answer: c

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: On What basis receipts and payments account is made
a) Cash basis
b) Accrual basis
c) Both Cash & Accrual basis
d) None of the options
Answer: a

Fill in the blanks:

Question: restricted fund can be used for —-, —-purpose
Answer: Specific

Question: ——————— ——- represents the excess of assets over liabilities.-
Answer: Capital fund

Question: Endowment Fund is ——.,—-Fund.
Answer: General fund

Question: Fund based accounting is used by —-,———-organisations.
Answer: Not for profit

Question:General Fund can be transferred to — — Fund
Answer: Any other

Question: restricted fund can be used for ————————-purpose.
Answer: Specific

Question: Endowment Fund is —————————Fun.
Answer: General fund,

Question: —————————– represents the excess of assets over liabilities.
Answer: Capital fund

Question: When Expenditure is paid out of current/ restricted fund, cash/bank account is credited and ——–. ——————–is debited.
Answer: Restricted fund

True or False

State whether the following statements are True or False

Question: Charitable institutions prepare income and expenditure account at the end of everyfinancial year.
Answer: True

Question: In the income and Expenditure Account, all incomes received during the year irrespectiveof the year for which they are received, are to be recorde
Answer: False

Question: All receipts are the items of revenue nature.
Answer: False

Question: Not for profit concerns concentrate their efforts on maximising the profits.
Answer: False

Question: There is no difference between the nature of Receipt & Payment Account and Income &Expenditure account.
Answer: False

Question: Income & expenditure account do not have opening balance.
Answer: True 

1 In the absence of Partnership Deed , Interest on loan of a partner is allowed 
2 In the absence of Partnership Deed Interest on Drawing of a partner is charged
(a) 8% per annum
(b) 9 % per annum
(c) 6% per annum
(d) No Interest is charged
Answer: [ 1- c ; 2- d ]

1 A and B are Partners. The net divisible profit as per Profit & Loss Appropriation account is Rs 2,50,000 . The total interest on partner’s Drawing is Rs 4,000 . A’ salary Rs 4,000 per quarter and B’ salary is Rs 40,000 per annum. What will net profit or loss earned during the year . 
2 A and B are Partners . The net divisible profit as per Profit & Loss Appropriation account is Rs 2,50,000 . The total interest on partner’s Drawing is Rs 4,000 . A’ salary Rs 4,000 per quarter and B’ salary is Rs 40,000 per annum. What will be A’ s share of profit . 
(a) Rs 2,50,000
(b) Rs 1,25,000
(c) Rs 3,02,000
(d) Rs 3,06,000
Answer: ( 1: c ; 2- b)

1 A entitled to a salary of Rs 10,000 per annum and commission of 10 % 0f the Net profit after charging his salary but before charging his commission . The Net profit Rs 2,30,000. What will be the amount of A’ s Commission. 
2 B entitled to commission of 10 % on net profit after charging his commission . The Net profit Rs 2,20,000 .what will be the amount of B’ s Commission .
(a) Rs 23,000
(b) Rs 22,000
(c) Rs 20,000
(d) Rs 25,000
Answer: ( 1- b ; 2-b )

1 A Drawings Rs 50,000 during the year .The rate of Interest on Drawing is 10% per annum . what will be amount of interest on drawing : 
2 A drawing Rs 50,000 during the year . The rate of Interest on Drawing 10 % . What will be amount of interest on drawing 
(a) Rs 5,000
(b)Rs 2,500
(c) Rs 10,000
(d) Rs 15,000
Answer: ( 1- b ; 2- a )

1 Ratio in which Partners share profit & losses before reconstitution of firm a) New profit sharing ratio
2 Ratio in which Partners surrenders their share of profit in favour of other partner’s b) Gaining Ratio
3 Ratio in which all the Partners share the future profit and losses c) Sacrificing Ratio
4 Ratio in which Partners acquire the share from other d) Old Ratio
Answer: ( 1- b, 2- c ; 3- a ; 4 – b )