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

Question: Which of the following is regarded as apt to show purchase of fixed asset for a non profit organisation
a) Income & Expenditure Account
b) Profit & Loss Account
c) Balance Sheet
d) None of the above
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: If there is a ‘Match Fund’, then match expenses and incomes are transferred to:
a) Income and Expenditure A/c
b) Assets side of Balance Sheet
c) Liabilities side of Balance Sheet
d) Both Income and Expenditure A/c and to Balance Sheet
Answer: c

Question: Source of income for a not-for-profit organisation is:
a) Subscription from Members
b) Donation
c) Entrance Fees
d) All of the above
Answer: d

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

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: Amount received from sale of grass by a club should be treated as:
a) Capital Receipt
b) Revenue Receipt
c) Asset
d) Earned Income
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: Income & Expenditure Account is based on
a) Cash Accounting
b) Accrual Accounting
c) Government Accounting
d) Management Accounting
Answer: b

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

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

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

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) None of the above
Answer: b

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

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

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: Which of the following is not an income?
a) Subscription
b) Donation
c) Sale of Ticket
d) Endowment Fund
Answer: d

Question: The Receipts and Payments Account is a summary of:
a) Debit and Credit balance of Ledger Accounts
b) Cash Receipts and Payments
c) Expenses and Incomes
d) Assets and Liabilities
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: Subscription received in advance during the current year is:
a) An income
b) An asset
c) A liability
d) None of these
Answer: c

Question: Out of the following items, which is shown in the ‘Receipts and Payments A/c’ of a not-for-profit organisation?
a) Subscription received in advance
b) Last year subscription received
c) Current year subscription received
d) All of the above
Answer: d

Question: Income and Expenditure Account is a:
a) Personal Account
b) Real Account
c) Nominal Account
d) Real and Nominal Account, both
Answer: c

Question: The financial statements of the Not-for-Profit Organisation are:
a) Receipts and Payments Account
b) Income and Expenditure Account
c) Balance Sheet
d) All of the above
Answer: d

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

Question: Subscription received in cash during the year amounted to ₹40,000; subscription outstanding at the end of previous year was ₹1,500 and outstanding at the end of current year was ₹2,000. Subscription received in advance for next year was ₹800. The amount credited to Income & Expenditure Account will be:
a) ₹38,700
b) ₹39,700
c) ₹40,300
d) ₹41,300
Answer: b

Question: Which of the following is not a revenue receipt?
a) Life Membership Subscription
b) Donation
c) Subscription
d) Interest on Investments
Answer: a

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

Question: If a general donation of smaller amount is received by a school, that donation will be shown in:
a) Liability Side
b) Asset Side
c) Debit side of Receipt and Payment A/c
d) Credit side of Receipt and Payment A/c
Answer: c

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

Fill in the blanks:

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

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

Question: Outstanding Subscriptions are shown on the ______________ side of Balance sheet.
Answer: Assets

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

Question: Not for Profit Organisation is a ____________ Legal entity.
Answer: Separate

Question: Scholarships grant to students by the government will be ____________ to Income & Expenditure account.
Answer: Debited

Question: Capital fund Is also known as _________________
Answer: Accumulated Fund

Question: An NPO does not have ____________ like proprietorship, partnership and joint stock company.
Answer: Capital

Question: Donations for specific purposes are always ____________.
Answer: Capitalised

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: Subscriptions are ___________ in nature for a Not for Profit Organisation
Answer: Revenue

Question: Purchase of sports material is ______________ to Income & Expenditure account.
Answer: Debited

True or False

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

Question: Income and Expenditure Account is prepared on cash basis while Receipts and Payments Account is prepared on accrual basis.
Answer: False

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

Question: Deficit decreases the credit balance of Capital Fund.
Answer: True

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

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

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

Question: Bank overdraft is shown on credit side of Receipts and Payments Account in the beginning of the year.
Answer: True

Question: If a Club has 400 members each paying a monthly subscription of Rs. 100, Subscription to be credited to Income and Expenditure Account is Rs. 40,000.
Answer: True

Question: In the income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.;
Answer: False

Match The Following

Question: 

Answer: [1 – c; 2 – d; 3 – b]

Question:

Answer: [1 – c; 2 – a]

Question:

Answer: 1 – c; 2 – d; 3 – a