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CBSE Questions for Class 12 Commerce Accountancy Accounting For Not-For-Profit Organisations Quiz 1 - MCQExams.com
CBSE
Class 12 Commerce Accountancy
Accounting For Not-For-Profit Organisations
Quiz 1
Funds raised by Not-for-Profit Organisations through various sources is __________account.
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0%
credited to capital fund
0%
debited to capital fund
0%
credited to assets
0%
debited to assets
Explanation
Funds raised by Non-for-Profit organizations through various sources are credited to the capital fund. Capital fund is the excess of assets over liabilities. So, the excess amount which is mostly the income of the organization is the funds raised by them. Any addition in funds will be added to the capital fund/general fund.
The funds raised by not-for-profit organisations are credited to _________.
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0%
Capital fund
0%
Partners' capital
0%
Cash
0%
Owner's fund
Explanation
The funds raised by the not-for-profit-organisation are transferred to the capital fund. This is because like any other profit earning organisation they don't have a capital account to be shown in balance sheet. So, the excess of assets over liabilities is credited to capital fund.
Following item come under head fixed assets______________.
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0%
Discarded during the year
0%
Sold during the year
0%
Destroyed during the year
0%
None of the above
Explanation
The items that are recorded under head fixed assets are assets purchased, added or constructed during the year. Fixed assets are the assets that are purchased for long term use of the business.
Not-for-Profit Organisations do not maintain_______account.
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0%
capital
0%
cash
0%
bank
0%
income
Explanation
Non-for-Profit organizations do not maintain Capital account. They prepare Income and Expenditure account (profit and loss account), Receipts and Payments account (cash & bank accounts), and Balance Sheet. Instead of a capital account, NPOs maintain a Capital Fund for the accumulation of surplus, general donations, subscriptions, etc.
The information for the preparation of receipt and payments account is taken from _________.
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0%
Cash book
0%
Income and Expenditure A/c
0%
Cash Book and Balance Sheet
0%
Revenue Account
Explanation
Receipts and payment account is an extension of cash book. All receipts and payments are recorded in receipts and payment account for which all information is taken from cash book.
Revenue receipts are ___________ in the business.
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0%
non-recurring
0%
recurring
0%
accumulating
0%
non-accumulating
Explanation
Receipts can be classified as revenue receipts and capital receipts. Revenue receipts are those which are received by firm in the normal course of business. These are recurring in nature. For example, membership fee from a club member.
Income and expenditure account reveals ____________.
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0%
Cash in hand
0%
Surplus or Deficiency
0%
Capital Account
0%
Revenue Account
Explanation
Income and expenditure account is prepared to present income and expenses. Excess of Income over expenditure is called surplus and excess of expenditure over income is called deficit.
In the Not-For-Profit Micro Finance Institutes.
Which among the following are included?
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0%
Societies
0%
Public Trusts
0%
Non-Profit Companies
0%
All of these
Non-trading institutions prepares ______________.
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0%
income and expenditure account
0%
trading and profit and loss account
0%
only trading account
0%
only revenue account
Explanation
Income & expenditure account is normally prepared by the non trading organizations like lawyers, doctors, chartered accountants etc.
The receipts and payments account begins with __________.
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0%
Debit balance
0%
Credit balance
0%
No balance
0%
Normal balance
Explanation
Debit side of the receipts and payment account starts with opening balances of cash and bank in the receipts side. Receipts & payment account record all the receipts and payment.
Income and expenditure account is prepared by _________ concerns.
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0%
non-trading
0%
trading
0%
partnership
0%
sole proprietor
Explanation
Professionals like doctors, CA's, lawyers are not involved in any trading activity. Income and expenditure account is prepared to record their income and expense.
The closing debit balance in the receipts and payments account indicates the ________ balance at the end of the year.
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0%
opening
0%
closing
0%
trading
0%
cash
Explanation
Receipts and payments account is like a cash book which records all the receipts and payments irrespective of the period. Excess of debit over credit is a closing debit balance and it indicates the cash balance.
Receipts and payment account shows ___________.
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0%
income and expenditure
0%
cash receipts and payments
0%
assets and liabilities
0%
profit on sale
Explanation
Receipts and payments account is prepared by taking the information from cash book. It records all the cash receipts and payments including revenue and capital.
Non-trading institutions prepare ___________.
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0%
profit and loss account
0%
trading account
0%
manufacturing account
0%
income and expenditure account
Explanation
Non trading organizations like professionals i.e doctors, chartered accountants, lawyers are preparing the income and expenditure account.
The revenue receipts are to be shown on ______side.
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0%
credit side of income & expenditure
0%
debit side of income & expenditure
0%
asset side of balance sheet
0%
liabilitie side of balance sheet
Explanation
Receipts may be classified as revenue receipts and capital receipts.
Receipts which are received in the normal course of business are treated as revenue receipts.
Receipts which are received with a specific object is considered as capital receipts.
Revenue receipts are credited to income account and shown in the credit side of Income & Expenditure account.
Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I (Item of balance sheet of company)
List-II (Heading of balance sheet)
(a) Sundry debtors
Fixed asset
(b) Bills of exchange
Misc. Expenses
(c) Live stock
Current asset
(d) Shares issue expenses
Loans & Advances
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0%
(a)-3, (b)-4, (c)-2, (d)-1
0%
(a)-2, (b)-1, (c)-3, (d)-4
0%
(a)-1, (b)-2, (c)-3, (d)-4
0%
(a)-3, (b)-4, (c)-1, (d)-2
Explanation
Item of Balance Sheet
Heading of Balance Sheet
Sundry Debtors
Current Assets
Bill of Exchange
Loans & Advances
Live Stock
Fixed Assets
Shares issue expenses
Misc Expenses
Which of the following does not effect cash flows proposal?
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0%
Salvage Value
0%
Depreciation Amount
0%
Tax Rate Change
0%
Method of Project Financing
Explanation
The method of Project Financing (like debt, equity, etc) does not affect cash flow statement because a cash flow statement deals with the inflows and outflows of cash/funds, irrespective of their sources.
Income and expenditure account is also called as a ________ account.
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0%
real
0%
nominal
0%
personal
0%
cash
Explanation
Income & expenditure accounts are prepared by considering all the incomes and expenses. Incomes & expenses are nominal accounts. Hence Income & expenditure account is a nominal account.
Shankar introduces Rs. 5000 as additional capital in the business. This amount will be considered as ___________.
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0%
Capital Receipt
0%
Revenue Receipt
0%
Capital and Revenue Receipt
0%
Deferred Revenue Expenditure
Explanation
Separate entity concepts defines that business and business man are two separate legal entity in the eyes of law.
Revenue receipts are those which are coming in the business against the normal business activity but the capital receipts are those which are contributed towards long term business activity.
Any amount contributed by the owner is considered as capital and shown in balance sheet as liability. Additional contribution towards capital is also a capital receipts and should be shown in liability as addition to capital.
Which of the following is an example of capital expenditure?
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0%
Purchased a pencil sharpener at a cost of Rs.2
0%
Installing an escalator at cost of Rs.5,600 in a three storey building which had previously been used without escalator
0%
Painted delivery truck at a cost of Rs.450 after two years of use
0%
None of the above
Explanation
Capital expenditure is a money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.
Installing an escalator is a capital expenditure as it is a non-recurring expenditure.
Subscription amounting to Rs. 7,500 appear on the credit side of income and expenditure account after adjusting subscriptions out standing Rs. 600 and subscriptions received in advance Rs.The amount of subscriptions to be shown in the receipts and payments account for the same year will be.
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0%
Rs. 6,450
0%
Rs. 7,350
0%
Rs. 7,650
0%
Rs. 8,550
Explanation
Calculation of amount of subscription received during the year.
Particulars Amount
Subscription earned during the year 7,500
Add:- Subscriptions received in advance at the end of the year 450
Less:- Outstanding subscriptions at the end of the year (600)
______
Amount of subscriptions received during the year 7,350
Income and Expenditure Account belongs to ______ account.
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0%
Real account
0%
Personal account
0%
Nominal accounts
0%
All of the above
Explanation
Every business have to make its financial statement at the end of every year which includes profit & loss account and balance sheet.
All expenses and Income accounts are transferred to profit & loss account/ Income & Expenditure account to know the Profit & Loss of the business.
All expense and Income accounts are classified as nominal accounts hence Income and Expenditure account belongs to nominal account.
Which one of the following concepts is used as fund in the preparation of Funds Flow Statements?
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0%
Current Assets
0%
Working Capital
0%
Cash
0%
All Financial Resources
Explanation
According to working capital concept, the term 'funds' refers to net working
capital (current assets-current liabilities). In the funds statement, inflow and outflow of net working capital is displayed.
Which of the following is not a current liability in the balance sheet ?
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0%
Loan from bank
0%
Acceptance
0%
Unclaimed dividend
0%
Interest accrued but not due on loan
Explanation
Loan from a bank is a long term liability which need not to be paid within a year. Current liabilities are those which are expected to be paid in next 12 months.
Hence Bank Loan is not a current liability.
Income and Expenditure account is ______ to account like Profit and Loss account.
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0%
real
0%
personal
0%
nominal
0%
expense
Explanation
Income and Expenditure account is prepared by non-trading concern to reveal the surplus or deficit arising out of the operating activities during the accounting period. It is one of the final accounts of non-trading concern like the profit and loss account of the trading concern,
Income and Expenditure accounts shows a balance of ________________.
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0%
Surplus or Deficit
0%
Cash in hand at the end
0%
Net Profit/Loss
0%
Capital Fund
Explanation
Income and expenditure account is prepared by a non-trading concern to reveal the surplus or deficit arising out of the operating activities during the accounting period.
Final accounts of NPOs consist of three parts _______________.
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0%
Trading; Profit and loss account; Balance sheet
0%
Receipt and expenditure account; Income and expenditure account; Balance sheet
0%
Trading; Profit and loss account; Profit and loss appropriation account
0%
Receipt and payment account; Profit and loss account; Balance sheet
Explanation
Receipt and payment account:
A summary of cash receipt and cash payments, all transactions whether it belongs to past or future are recorded if such transactions occurred during the accounting period.
Income and expenditure account:
Income and expenditure account records income and expenses occurred during the year.
Balance sheet:
Balance sheet record all assets and liability of the company.
At the beginning of accounting year the following particulars are extracted value of Assets Rs. 25,000, Liabilities Rs. 5,000, Debit balance of income and expenditure account Rs. 2,Then capital fund will be ____________.
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0%
Rs. 32,500
0%
Rs. 22,500
0%
Rs. 27,500
0%
Rs. 20,000
Explanation
Capital Fund = Extracted value of Assets + Debit bal. of Income and expenditure - Liabilities
Capital Fund = Rs. 25,000 + Rs. 2,500 - Rs. 5,000
Capital Fund = Rs. 22,500
Which of the following current asset?
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0%
Stock
0%
Creditors
0%
Proposed Dividend
0%
Tax
Explanation
Current Assets are those which are generated during the course of business. This may change with each of the business transactions. Examples of current assets are stock, bills receivables, sundry debtors, cash on hand, cash at bank etc.
For example, if goods purchased by the organization, in such case stock will increase against which cash may go down.
Which of the following is not an intangible asset?
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0%
Goodwill
0%
Preliminary expenses
0%
Patents rights
0%
Copy rights
Explanation
Intangible assets are as follows -
- Goodwill
- Patent Rights
- Copyrights
- Trademark
- License
- Quata
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