ACCOUNTING FOR NOT FOR PROFIT ORGANISATION (NPO)
MULTIPLE CHOICE QUESTIONS (MCQS)
For Class 12/CMA/CA/CS/B.Com Courses
State whether each of the following statements in true or false:
a) A non-profit organisation never undertakes trading activities. False, Incidental Trading activities
b) Receipts and Payments Account is a real account. True
c) Receipts and Payments account is a summary of cash transactions. True
d) Receipts and Payments account is an Expenses Account. False
e) Receipts and Payments account is equivalent to Profit and Loss Account. False, Cash Book
f) Receipts and Payments account shows the cash position. True
g) Receipts and Payments account is similar to Cash book. True
h) Receipts and Payments Account records only the revenue receipts and revenue payments. False
i) Receipts and Payments Account records only capital receipts and capital payments. False
j) Receipts and Payments Account records both revenue and capital receipts and payments. Received or paid during a year. True
k) A Receipts and Payments Account is followed by a balance sheet. False
l) Receipts and payment account shows receipts and payments for a particular period. True
m) Balance of Receipts and Payments Account at the close of the period is the profit earned by the concern. False
n) Income and Expenditure Account is a real account. False, Nominal Account
o) Income and Expenditure account is similar to profit and loss account. True
p) Tinsukia College is a Not-for-profit organisation. True
q) Income and Expenditure Account of non-trading concern is equivalent to profit and loss account of a trading concern. True
r) An Income and Expenditure Account open with a balance. False
s) An Income and Expenditure Account is not followed by a balance sheet. False
t) In Income and Expenditure account includes only revenue items. True
u) A credit balance of Income and Expenditure denotes an excess of expenses over incomes. False
v) A debit balance of income and expenditure denotes an excess of expenses over incomes. True
w) Subscription in arrear is shown on the credit side of income and expenditure account and assets side of balance sheet. True
x) Admission fees should be treated as revenue unless the amount is pretty large. True
y) Profit on sale of furniture is credited to income and expenditure account. True
z) Life membership fees should be capitalized. True
aa) If there is a specific fund for prize, then income or expenditure relating to prize distribution should not be shown in the income and expenditure account. True
bb) Income from investment of any fund is added with the respective firm. True
cc) Receipts and Payments account is prepared on cash basis of accounting. 2013 True
dd) Income and expenditure account is prepared on accrual basis of accounting. True
ee) Donation for specific purposes is always capitalised. True
ff) Income derived from the specific fund investment is credited to the Specific Fund Account. True
gg) The whole of the sale value of a fixed assets is treated as in income. False, It is a capital receipt
hh) Capital Grant received from the Govt. is a capital income & not to be credited to the Income and Expenditure Account. True
Multiple Choice Questions and Answers (MCQs) | ||
Financial Accounting | Corporate Accounting |
|
Hire Purchase and Installment System Not for Profit Organisation | Issue and Redemption of Debentures Redemption of Preference Shares |
|
Management Accounting | Chapter Wise MCQs |
|
B. Fill in the blank with appropriate word or words:
1. Receipts and Payments account and Income and Expenditure are prepared by a NPO.
2. Receipts and Payments Account generally starts with opening balance of cash and bank.
3. A Receipts and payment Account is prepared on cash basis of accounting.
4. A receipts and payments account records both capital and revenue items.
5. In Receipts and Payments Account only cash transactions are shown.
6. A Income and Expenditure Account is prepared on accrual basis of account.
7. An Income and Expenditure Account records only transactions of revenue nature.
8. Outstanding subscription is shown on the asset side of the balance sheet.
9. Capital expenditure provide long term benefit.
10. Fund based accounting is maintained by Non trading Concern.
11. A life membership fee is a Capital Receipt.
12. A debit balance in the Income and Expenditure A/c denotes excess of Expenditure over Income.
13. A credit balance in the Income and Expenditure A/c denotes excess of Income over Expenditure.
14. Debit balance in income and expenditure a/c is Deficit and credit balance is Surplus.
15. Not for profit organisation prepares Income and Expenditure a/c and Receipts and Payments a/c.
16. Subscription received in advance is treated as Liability. (any amount received in advance is a liability)
17. Legacy is an item of Non-recurring nature. (Non-recurring = capital receipt)
18. Endowment fund is a capital receipt.
19. Receipts and Payments Account and Income and Expenditure Account are prepared by a Non-trading concern.
20. An Income accrued is shown on the assets side of the balance sheet.
21. Interest received on the investment of a specific fund is credited to Specific Fund Account
22. Capital Grant is added to Capital Fund.
23. Expenses of tournament are debited to Tournament Fund Account.
24. Income and Expenditure Account starts with No balance.
25. Receipts and Payments account is prepared on Cash basis.
26. Income and Expenditure Account is prepared on Accrual basis.
C. Choose the correct alternative:
1. A not for profit organisation includes:
a) Religious Organisations
b) Trade unions
c) Clubs
d) Educational institutions
e) All of the above
2. In a NPO, membership paid every year is known as:
a) Entrance fees
b) Legacy
c) Subscription
d) Donation
3. Which of the following is not a source of funds for NPOs:
a) Grants in aid
b) Legacy
c) Sale of goods
d) Income from investments
4. A not for profit organisation prepares:
a) Receipts and Payments Account.
b) Trading Account.
c) Income and Expenditure Account.
d) Both (a) and (c)
5. An Income and Expenditure Account reveals:
a) Cash position.
b) Surplus or Deficit.
c) Capital Fund.
d) None of the above.
6. Donation received for a specific purpose is
a) Credited to Income and Expenditure Account.
b) Credited to a specific fund account.
c) Credited to the Capital Fund Account.
d) None of the above.
7. Subscription received in advance is
a) An asset account.
b) A liability account.
c) An income.
d) An expenses.
8. Excess of sports expenses over Sports Fund is:
a) Debited to the Income and Expenditure Account.
b) Deducted from capital Fund Account.
c) Shown on the assets side of the Balance Sheet as a negative balance.
d) None of the above.
9. Interest on Specific Fund is
a) Credited to Income and Expenditure Account.
b) Credited to the Specific Fund Account.
c) Debited to the Specific Fund Account.
d) Credited to Capital Fund Account.
10. When the construction of building is completed, the balance of Building Fund Account is
a) Transferred to Income and Expenditure Account.
b) Transferred to Capital Fund Account.
c) Continued in the Building Fund Account.
d) None of the above.
11. When there is a Building Fund and the construction of building is incomplete, the amount spent is:
a) Transferred to Capital Fund.
b) Transferred to Income and Expenditure Account.
c) Continued in the Building Fund Account.
d) None of the above.
12. When sports expenses are less the amount of Sports Fund, the items are shown in
a) Balance Sheet.
b) Receipts and Payment Account.
c) Income and Expenditure Account.
d) None of the above.
13. Life member fee is
a) A liability.
b) An asset.
c) An expenses.
d) None of the above.
14. Subscription received by a school for organising annual function is treated as:
a) Capital receipt (i.e. Liability)
b) Revenue receipt (i.e. Income)
c) Assets.
d) Earned income.
15. If there is a Match Fund, then match expenses and incomes on match fund are transferred to:
a) Income and Expenditure A/c.
b) Assets side of Balance Sheet.
c) Liabilities side of the Balance Sheet.
d) Match fund
16. Capital Receipts are represented in:
a) Balance Sheet.
b) Trading Account.
c) Profit and Loss Account.
d) Manufacturing Account.
Post a Comment
Kindly give your valuable feedback to improve this website.