CUET Accountancy MCQs Unit 1 Accounting Not for Profit Organisation

Question. When the Tournament Expenses incurred are more than the Tournament Fund, then the excess amount is

(a) Debited to Income and Expenditure account

(b) Credited to Tournament Fund

(c) Shown on the Asset side of Balance sheet

(d) Credited to Income and Expenditure Account

Answer: A

Question. Salaries paid during the year ended 31st March, 2020 is Rs. 36,000. Salaries paid in advance at the end of previous year were Rs. 54,000. The amount of Salaries to be debited to income and Expenditure Account for the year ended 31st March, 2020 will be

(a) Rs. 54,000.

(b) Rs. 36,000.

(c) Rs. 90,000.

(d) Rs. 18,000.

Answer: C

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 these

Answer: A

Question. Receipts and Payments Account is prepared on

(a) Cash Basis.

(b) Time Basis.

(c) Accrual Basis.

(d) Sales Basis.

Answer: A

Question. Not-for-profit organisations prepare:

(a) Trading Account

(b) Trading & Profit and Loss Account

(c) Income and Expenditure Account

(d) All of the above

Answer: C

Question. Main source of Income for a Not-for-Profit Organisation is

(a) Rent.

(b) Salaries.

(c) Donations and Subscriptions.

(d) Sale of Assets.

Answer: C

Question. Receipts and Payments Account is a

(a) Real Account.

(b) Nominal Account.

(c) Personal Account.

(d) Revenue Account

Answer: A

Question.Income and Expenditure Account records transactions of:

(a) Revenue nature only

(b) Capital nature only

(c) Both revenue and capital nature

(d) Income of only revenue nature and expenditure of revenue and capital nature.

Answer: A

Question. Choose NPO from the following:

(a) Reliance Industries Limited

(b) Indian Hoc Important Federation

(c) Infosys Ltd.

(d) Private Hospital

Answer: B

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. The amount of ‘Entrance Fees’ received by a Non-profit organisation (if it is received regularly) is shown in which of the following?

(a) Liability side of Balance Sheet

(b) Assets side of Balance Sheet

(c) Debit side of Income and Expenditure Account

(d) Credit side of Income and Expenditure Account

 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. Legacy Donation received by NPO to be used for specific purpose is accounted as

(a) Revenue Receipt.

(b) Capital Receipt.

(c) an Asset.

(d) is decided by the Management.

Answer: B

Question. Which of the following is never shown on the ‘Payments’ side of Receipts and Payments Account, but is shown as an Expense while which preparing ‘Income and Expenditure Account’?

(a) Depreciation on fixed assets  

(b) Outstanding Expenses 

(c) Loss on sale of fixed assets 

(d) All of these

 Answer: D

Question. Which of the following is not a capital receipt?

(a) Endowment Fund  

(b) Government Grants 

(c) Life Membership Fees  

(d) Donations for Building

Answer: B

Question. Salaries paid during the year ended 31st March, 2020 is Rs. 36,000. Salaries paid in advance at the end of previous year were Rs. 54,000. The amount of Salaries to be debited to income and Expenditure Account for the year ended 31st March, 2020 will be

(a) Rs. 54,000.

(b) Rs. 36,000.

(c) Rs. 90,000.

(d) Rs. 18,000.

Answer: C

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. Choose NPO from the following:

(a) Reliance Industries Limited

(b) Indian Hoc Important Federation

(c) Infosys Ltd.

(d) Private Hospital

Answer: B

Question. How are specific donations treated while preparing final accounts of a ‘Not-for-Profit Organisation’?

(a) Shown on the debit side of Receipt and Payment Account 

(b) Capitalized, i.e. shown on the liabilities side of the Balance Sheet 

(c) Both (a) and (b)

(d) Treated as revenue receipts and taken to the credit of Income and Expenditure Account

Answer: C

Question. Receipts and payments account makes no difference between:

(a) Capital Receipts and Capital payments 

(b) Revenue receipts and revenue payments

(c) Current year and previous year 

(d) All the above.

 Answer: D

Question. Delhi cricket club gives the following information. Opening Stadium Fund is <10, 00,000. Donation for Stadium fund received during the year Rs.500000. Income from Stadium Fund Investment Rs.100000. Amount spent during the year on construction of stadium is Rs.600000. Identify which of the following statement is correct in respect to preparation of Balance sheet.

(a) Rs.600000 shown on the asset side of the Balance sheet.

(b) Rs.600000 shown on the asset side of the Balance sheet Also Rs.600000 is transferred to the credit of Income and Expenditure account,

(c) Rs.600000 shown on the asset side of the Balance sheet Also Rs.600000 is transferred from Stadium fund to General fund in the Balance sheet.

(d) Rs.600000 is shown as an expense in the Income and Expenditure account and Rs.600000 is transferred to the credit pf Income and Expenditure account from Stadium fund.

Answer: C

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. Features of a partnership firm are :

(a) Two or more persons are carrying common business under an agreement.

(b) They are sharing profits and losses in the fixed ratio.

(c) Business is carried by all or any of them acting for all as an agent.

(d) All of the above.

Answer: A

Question. Subscription received during the year 2019-20: Rs. 1,50,000. Outstanding Subscription as on 31st March, 2019: Rs. 1,00,000. The amount shown as subscription receipt will be

(a) Rs. 50,000.

(b) Rs. 1,50,000.

(c) Rs. 1,00,000.

(d) Rs. 1,25,000.

Answer: A

Question. Income and Expenditure Account records:

(a) Receipts and Payment of Revenue and Capital nature both. 

(b) Income and Expenditure of Revenue nature only.

(c) Expenditure of Capital nature only. 

(d) Receipts of Revenue nature only.

Answer: B

Question. Title of the account which shows Surplus/Deficit of NPO is

(a) Cash Book.

(b) Income and Expenditure Account.

(c) Receipts and Payments Account.

(d) Balance Sheet.

Answer: B

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

Question. Credit purchase of stationery is Rs. 64,000, which is 80% of total purchase, compute cash purchase of stationery,

(a) Rs. 16,000

(b) Rs. 24,000

(c) Rs. 8,000

(d) Rs. 40,000.

Answer: A

Question. Which of the following statements is true for Receipts and Payments Account?

(a) It is prepared on accrual basis. 

(b) It records receipts and payments of revenue nature only. 

(c) Depreciation is debited to this account. 

(d) Receipts and payments may relate to current, preceding or succeeding periods.

 Answer: D

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. Subscription outstanding for the year 2018-19 is Rs.2500. Subscription outstanding for the year 2017-18 was Rs.5000 out of which Rs.3000 were received during the year 2018-19. The outstanding subscription to be shown in the Income and expenditure for current year 2018-19 is :

(a) Rs. 500 

(b) Rs.1000 

(c) Rs.2500 

(d) Rs.3000

Answer: A

Question. <100000 received as annual subscription. Out of this <20000 is of pervious year whereas <10000 is receivable at the end of the current year. Amount of subscription that will be show in income and expenditure account will be

(a) <1, 00,000 

(b) <90, 000 

(c) <1, 20,000 

(d) <80, 000

Answer: B

Question. The account which shows classified summary of transactions of a Cash Book’ in a Not-for-Profit Organisation is called:

(a) Income and Expenditure A/c  

(b) Receipts and Payments A/c

(c) Profit and Loss A/c  

(d) Subscriptions A/c

Answer: B

Question. Unique Club had a prize Fund of ₹9,10,000 on 1st April, 2019. It incurred expenses on prizes amounting to ₹9,10,000 during the year. The balance of Prize fund in the balance sheet as on 31st March, 2020 will be:

(a) ₹10,000  

(b) ₹10,000  

(c) ₹9,00,000  

(d) Zero

 Answer: D

Question. General Donation received by NPO is shown in the

(a) Credit side of income and Expenditure Account,

(b) Debit side of income and Expenditure Account

(c) Liabilities side of Balance Sheet

(d) Assets side of the Balance Sheet.

Answer: A

Question. Income and Expenditure Account reveals:

(a) Surplus or Deficiency

(b) Cash in Hand

(c) Net Profit

(d) Capital Account

Answer: A

Question. Out of the following items, which is not shown in the ‘Receipts and Payments A/c’ of a not for profit organisation?

(a) Subscription received in advance

(b) Subscription due

(c) Last year subscription received

(d) All of the above

Answer: B

Question. Following are essential elements of a partnership firm except:

(a) At least two persons

(b) There is an agreement between all partners

(c) Equal share of profits and losses

(d) Partnership agreement is for some business.

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. Which of the following is a capital receipt?

(a) Subscriptions  

(b) Sale of used sports material 

(c) Endowment fund 

(d) Entrance fees

Answer: C

Question. Out of the following items, which is not shown in the ‘Receipts and Payments A/c’ of a not for profit organisation?

(a) Subscription received in advance

(b) Subscription due

(c) Last year subscription received

(d) All of the above

Answer: B

Question. Surplus of Not-for –Profit organisations

(a) Distributed among the members

(b) Is not distributed among the members

(c) May be or May not be distributed among the members

(d) Is debited to General fund.

Answer: B

Question. Which of the following statements is not true for Income and Expenditure Account?

(a) It records items of revenue nature only.  

(b) Items recorded in it relate only to the current period. 

(c) Depreciation is not recorded in this account. 

(d) It does not have an opening balance.

Answer: C

Question. Calculate the amount of credit purchase from the following information:

During the year ended 31st March, 2020, payment made to creditors of Rs. 56,800.

(a) Rs. 54,000

(b) Rs. 64,000

(c) Rs. 74,000

(d) Rs. 44,000

Answer: B

Question. On 1st April 2019, Maitreyi Club had a Prize Fund of `8,00,000. It incurred expenses on prizes amounting to `8,70,000 during the year. The balance of Prize Fund in the Balance Sheet as at 31st March, 2020 will be:

(a) ₹70,000  

(b) ₹8,00,000  

(c) ₹70,000  

(d) Zero

 Answer: D

Question. Life Membership Fee received by NPO is accounted as

(a) Revenue Receipt.

(b) Capital Receipt.

(c) an Asset.

(d) Miscellaneous Receipt.

Answer: B

Question. The opening balance of Prize Fund was Rs.32,800. During the year, donations received towards this fund amounted to Rs. 15,400; amount spent on prizes was Rs. 12,300 and interest received on prize fund investment was Rs.4,000. The closing balance of Prize Fund will be :

(a) Rs. 56,500

(b) Rs.64,500

(c) Rs.39,900

(d) Rs. 31,900

Answer: C

Question. Receipts and Payments Account is a summary of

(a) Debit and Credit balances of Ledger Account.

(b) Cash receipts and payments.

(c) incomes and Expenses.

(d) Balances of assets and liabilities.

Answer: B

Question. Which of the following is never shown on the ‘Payment side’ of Receipts and Payments Account but is shown as an expense while preparing Income and Expenditure Account?

(a) Depreciation on fixed assets 

(b) Outstanding expenses 

(c) Loss on sale of fixed assets  

(d) All of these

 Answer: D

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. If Life Membership fees of <5000 wrongly treated as revenue receipt then effect of this error on surplus and closing balance of capital fund will be

(a) Capital fund increased and surplus increased by<5000

(b) Capita fund decreased and surplus increased by<5000

(c) No effect on capital fund but surplus increased by<5000

(d) Capital fund decreased by <5000 but no effect on surplus.

Answer: C

Question. Which of the following statements is not true for Receipts and Payments Account?

(a) It is a summary of the Cash Book. 

(b) It records receipts and payments of revenue nature only.

(c) The receipts and payments may relate to current, preceding, or succeeding accounting periods. 

(d) Depreciation is not shown in it.

Answer: B

Question. Which of the following is included in the major sources of income of not-for-profit organisations?

(a) Donations (general)  

(b) Legacies (general) 

(c) Income from investments  

(d) All of these

 Answer: D

Question. The amount received for sale of old sports materials by a Non-profit organisation is shown in which of the following?

(a) Debit side of Income and Expenditure Account

(b) Liability side of Balance Sheet

(c) Credit side of Income and Expenditure Account

(d) Assets side of Balance Sheet

Answer: C

Question. Which of the following is a revenue receipt for a not-for-profit organisation?

(a) Endowment fund  

(b) Government Grants

(c) Life Membership fees  

(d) Legacies (specific)

Answer: B

Question. How much amount will be shown in Income and Expenditure Account in the following case?

                                       1-4-2019     31-3-2020

Creditors for Stationery       8,000            6,000

Stock of Stationery              3,000            3,200

During 2019-20 payment made for Stationery was Rs.60,000.

(a) Rs.57,800

(b) Rs.62,200

(c) Rs.61,800

(d) Rs.5 8,200

Answer: A

Question. Entrance fees received amounted to Rs.50,000. In this 25% is to be capitalized. Mention the amount to be shown in income side of Income and Expenditure account:

(a) 12,500 

(b)13,200 

(c) 50,000 

(d) 37,500

 Answer: D

Question. Identify revenue receipt from the following:

(a) Donations for Building

(b) Subscription

(c) Life Membership Fees

(d) Legacy donation for Library.

Answer: B

Question. On 1stApril, 2019, Queens Club had a prize Fund had a prize Fund of ₹4,00,000. During the year it incurred expenses on prizes amounting to ₹4,30,000. The balance of prize Fund in the Balance Sheet as on 31stMarch, 2020 will be

(a) ₹30,000  

(b) ₹4,00,000  

(c) ₹30,000  

(d) Zero

 Answer: D

Question. Income and Expenditure Account is prepared on

(a) Cash Basis.

(b) Accrual Basis.

(c) Both (a) and (b).

(d) Sales Basis,

Answer: B

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. Which of the following is not a revenue receipt?

(a) Subscriptions  

(b) Endowment Fund

(c) Sale of Used sports Material  

(d) Entrance Fees

Answer: B

Question. Income and Expenditure Account is based on

(a) Cash Basis of Accounting.

(b) Accrual Basis of Accounting.

(c) Mixed Basis of Accounting.

(d) Management Accounting.

Answer: B

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. Sports Star Charitable club has income of ₹16,000 and ‘deficit’ debited to capital fund of ₹4,300 for the year 2019- 20, then expenditure for the year 2019-20 is: 

(a) ₹11,700  

(b) ₹4,300  

(c) ₹20,300 

(d) None of these

Answer: C

Question. There are 200 members, each paying an annual subscription of Rs. 1,000; subscription received during the year Rs. 1,95,000; subscriptions received in advance at the beginning of the year Rs. 3,000 and at the end of the year Rs.2,000. Amount shown in Income & Expenditure Account will be :

(a) Rs. 2,00,000

(b) Rs. 1,96,000

(c) Rs. 1,94,000

(d) Rs. 2,01,000

Answer: A

Question. Subscription received by a school for organising annual function is treated as:

(a) Capital Receipt (i.e., Liability)

(b) Revenue Receipt (;.e., Income)

(c) Asset

(d) Earned Income

Answer: A

Question. Jaipur Club has a prize fund of ₹6,00,000. It incurs expenses on prizes amounting to ₹5,20,000. The expenses should be:

(a) debited to income and expenditure account. 

(b) presented on the asset side of the balance sheet. 

(c) debited to income and expenditure account and presented on the asset side of the balance sheet. 

(d) deducted from the liability side of the balance sheet.

 Answer: D

Question. Subscriptions received during the year Rs.5,000,amount received in advance for the next year is Rs.300. Amount outstanding for current year was Rs.400. The amount to be credited to the Income and Expenditure account is

(a) 4,000

(b) 5100 

(c) 4200 

(d) 4600

Answer: B

Question. Salary paid in cash during the current year was Rs. 80,000; Outstanding salary at the end was Rs.4,000; Salary paid in advance last year pertaining to the current year was Rs.3,200; paid in advance during current year for next year was Rs.5,000. The amount debited to Income and Expenditure Account will be:

(a) Rs.85,800

(b) Rs.77,800

(c) Rs. 82,200

(d) Rs. 74,200

Answer: C

Question. If 10% Interest on Investment appearing in the Receipts side is Rs.7000, then the value of investment will be:

(a) Rs.1,00,000 

(b) 70,000 

(c) 56,000 

(d) 49,000

Answer: B

Question. Which of the following is not a capital receipt?

(a) Donations for tournament  

(b) Donations for building fund 

(c) Life membership fee  

(d) Entrance fees

 Answer: D

Question. Subscriptions received in advance by a club are shown

(a) in the credit side of the Income and Expenditure Account.

(b) in the assets side of the Balance Sheet.

(c) in the liabilities side of the Balance Sheet.

(d) in the payments side of Receipts and Payments Account.

Answer: C

Question. Furniture as on 31st March, 2019 Rs. 4,40,000. Furniture (having Book value as on 1st April, 2018 of Rs. 40,000) sold at a loss of 20% on 31st December, 2018. Furniture is depreciated @ 10% p.(a) Furniture costing Rs. 3,00,000 was also purchased on 1st October, 2018. Calculate Loss on sale of furniture.

(a) Rs. 9,400

(b) Rs. 6,400

(c) Rs. 8,000

(d) Rs. 7,400

 Answer: D

Question. Specific Donation received by NPO is shown in the

(a) Credit side of Income and Expenditure Account,

(b) Debit side of Income and Expenditure Account

(c) Liabilities side of Balance Sheet.

(d) As is decided by the management.

Answer: C

Question. Donation received for a special purpose:

(a) Should be credited to Income and Expenditure Account

(b) Should be credited to separate account and shown in the Balance Sheet

(c) Should be shown on the assets side

(d) Should not be recorded at all.

Answer: B

Question. Subscription received during the year Rs.50, 000. ;Subscriptions Outstanding at the end of the year` 8,000; Subscription outstanding at the beginning of the year ` 6,000. Net Income from subscription will be 

(a) 48,000 

(b) 64,000 

(c) 52,000 

(d) 36,000

Answer: C

Question. Stock of medicines on 1.4.18 were Rs.5000. Medicines purchased during the year is Rs.5000. Medicines sold during the year is Rs.2500. Closing stock of medicines are Rs.3000. Stock of medicines used during the year 2019 is:

(a) Rs.7000 

(b) Rs.2500 

(c) Rs.5000 

(d) Rs.10000

Answer: A

Question. The opening balance of Prize Fund was Rs.32,800. During the year, donations received towards this fund amounted to Rs. 15,400; amount spent on prizes was Rs. 12,300 and interest received on prize fund investment was Rs.4,000. The closing balance of Prize Fund will be :

(a) Rs. 56,500

(b) Rs.64,500

(c) Rs.39,900

(d) Rs. 31,900

Answer: C

Question. Furniture (Book value) Rs.5,000 were sold for Rs. 4,500. New Furniture worth Rs.10,000 were purchased during the year. The amount which is to be debited to Income and Expenditure account is :

(a) Profit on sale Rs.500 

(b) Loss on sale Rs.500 

(c) Sale of furniture Rs.4500 

(d) Purchase of Rs.10000

Answer: B

Question. Identify capital receipt from the following:

(a) Life Membership Fees

(b) Rent Receipt

(c) Entrance fees

(d) Sports expenses.

Answer: A

Question. Out of the following items, which one is shown in the ‘Receipts and Payments Account’ of a not for profit organisation?

(a) Accrued subscription

(b) Outstanding salary

(c) Depreciation

(d) None of these

 Answer: D

Question. Salary paid for the year ended 31st March, 2020 amounted to Rs.75,000. How much amount will be recorded in Income and Expenditure Account in the following case?

                                  31-3-2019    31-3-2020

Outstanding Salary          6,500            6,000

Prepaid Salary                 1,200            1,000

(a) Rs.75,700

(b) Rs.74,300

(c) Rs.75,300

(d) Rs.74,700

 Answer: D

Question. The Main purpose of Not-for- Profit organisation is :

(a) To earn profit 

(b) to serve the society 

(c) To improve the economy 

(d) None of the above.

Answer: B

Question. Which of the following is prepared to find out the income of a trading concern?

(a) Receipts and Payments a/c

(b) Income and Expenditure a/c

(c) Profit and Loss a/c

(d) Balance Sheet.

Answer: C

Question. Out of the following, which is Unrestricted Fund?

(a) Annuity Fund

(b) Sports Fund

(c) Capital Fund

(d) Endowment Fund

Answer: C

Question. If there is a 'Match Fund', then Match Expenses and Match Incomes are transferred to

(a) Income and Expenditure A/(c)

(b) Assets side of Balance Sheet.

(c) Match Fund in Liabilities side of Balance Sheet.

(d) Both Income and Expenditure A/c and to Balance Sheet.

Answer: C

Question. If Income is Rs.16,000 and deficit debited to Capital Fund is Rs.4,300 then Expenditure is: 

(a) 16,000 

(b) 4,300 

(c) 20,300 

(d) None of these

Answer: C